Socialist mayoral candidate Zohran Mamdani is proposing to jack up the income tax rate for New York City millionaires by 2% and use revenue generated from that and other tax hikes to fund some of his most ambitious policy proposals, like free bus service and expanded universal childcare.
The proposed income tax increase — which would require state legislative action and will likely draw pushback from more moderate politicians — is part of a revenue-generating plan Mamdani’s campaign shared exclusively with the Daily News ahead of its Wednesday release.
The additional 2% income tax would only apply to households earning more than $1 million annually, the plan states. There are about 34,000 city households in that income bracket, roughly 1% of the total population, and hitting them with the new 2% levy would generate $4 billion in new annual city revenue, with each paying about $20,000 more in taxes each year, per Mamdani’s plan.
In addition to the income tax hike proposal, the plan suggests raising New York’s top corporate tax rate to 11.5%, up from the current 7.5%, a boost that’d put the state’s levels on par with New Jersey’s. That increase — which would require action from state lawmakers in Albany, too — would generate another $5 billion in annual tax revenue, Mamdani’s plan projects.
Mamdani commits he would also as mayor hire 50 new city Department of Finance auditors, a workforce expansion that his plan, citing an Independent Budget Office study, says would result in a $165 million increase in annual tax revenue collection. Mamdani’s blueprint further pledges to enact certain city contract reforms his team estimates would save the city $300 million annually.
In an interview with The News this week, Mamdani said the roughly $10 billion in new revenue streams his plan projects unlocking would be “more than enough” to fund his most far-reaching policy promises.
But he acknowledged it won’t be easy to as mayor convince state stakeholders, including moderate Democratic Gov. Hochul, to adopt the tax hikes.
“Nothing that’s worth fighting for is easy, and this would be a difficult fight, but I think it is one that we can win,” Mamdani said, noting that then-Gov. Andrew Cuomo agreed to enact tax increases on wealthy residents in 2021 after initially opposing them. Currently an Assembly member representing western Queens, Mamdani also said he believes Democratic leaders in the state Legislature share his “vision” on tax policy.
Critics of higher New York taxes have long argued they could backfire by driving wealthy residents to leave the Big Apple for jurisdictions with lower taxes, depleting a key revenue base. Some economists also say corporate tax hikes could lead companies to move offices away from the city, depriving the municipal government of commercial real estate tax incomes.
Mamdani rejected the idea that high-income earners and corporations would flee in the event of tax hikes, arguing the same “fearmongering” played out ahead of the 2021 increases. Given that New Jersey, Connecticut and other surrounding states already have higher corporate tax rates than New York, Mamdani also said he’s “fully confident” companies won’t leave in the event of a corporate rate uptick.
“In 2021, we did not see the exodus they said would come. What we instead have seen is an exodus of working people who can’t stay because it’s too expensive,” he said.
Mamdani, a Democratic Socialists of America member, has long advocated for raising taxes on the rich to fund programs benefitting low-income New Yorkers.
Mamdani’s platform includes a vow to make MTA bus service in the city free for all. Other key pillars of his platform include a pledge to freeze rent for all stabilized tenants in the city and vow to make childcare free for all New Yorkers between the ages of six weeks and 5 years, an expansion of the universal 3-K and pre-K programs enacted under ex-Mayor Bill de Blasio.
Mamdani’s agenda has garnered significant grassroots support, especially among younger voters, with surveys of June’s Democratic mayoral primary consistently projecting him as the runner-up to Cuomo, who’s polling as the favorite to win the race. Mamdani’s also garnering momentum with fundraising, this week becoming the first 2025 mayoral candidate to pull in enough money to reach the spending cap for the primary.
Speaking to The News, Mamdani attributed his popularity to widespread support for his policy agenda, including tax hikes.
“This is immensely popular when polled,” he said of tax increases.
