Zohran Mamdani's Controversial Plan To Save NYC: Will It Actually Work?

Forbes

Zohran Mamdani won over New York City voters by promising to make the city more affordable with a rent freeze and free services funded in part with an added tax on the rich.  Read the full story on Forbes: https://www.forbes.com/sites/kellyphillipserb/2025/11/06/will-mamdanis-proposed-millionaire-tax-save-or-sink-new-york-city/  Subscribe to FORBES: https://www.youtube.com/user/Forbes?sub_confirmation=1  Fuel your success with Forbes. Gain unlimited access to premium journalism, including breaking news, groundbreaking in-depth reported stories, daily digests and more. Plus, members get a front-row seat at members-only events with leading thinkers and doers, access to premium video that can help you get ahead, an ad-light experience, early access to select products including NFT drops and more:  https://account.forbes.com/membership/?utm_source=youtube&utm_medium=display&utm_campaign=growth_non-sub_paid_subscribe_ytdescript  Stay Connected Forbes newsletters: https://newsletters.editorial.forbes.com Forbes on Facebook: http://fb.com/forbes Forbes Video on Twitter: http://www.twitter.com/forbes Forbes Video on Instagram: http://instagram.com/forbes More From Forbes:  http://forbes.com  Forbes covers the intersection of entrepreneurship, wealth, technology, business and lifestyle with a focus on people and success.

Transcript

00:00Today on Forbes, will Mamdani's proposed millionaire tax save or sink New York City?

00:07What would be the real result of a new millionaire tax in New York City,

00:11the kind that Mayor-elect Zoran Mamdani wants to impose?

00:15In June, after Mamdani, a self-described democratic socialist, won the Democratic primary,

00:22billionaire Bill Ackman, founder and CEO of Pershing Square Capital Management,

00:26suggested the answer is that wealthy taxpayers will flee.

00:30But Ackman had a more conciliatory tone following Mamdani's landslide win in the general election on Tuesday.

00:37After Mamdani received more than 50% of the vote in the general election,

00:41beating New York Governor Andrew Cuomo, with his long list of billionaire backers,

00:45by nearly 9 percentage points, Ackman offered his congratulations on X, adding,

00:50quote,

00:51Now you have a big responsibility. If I can help NYC, just let me know what I can do.

00:57But then, just days later, the volatile Ackman shifted his tone yet again, retweeting as, quote,

01:03an accurate prognosis, a post predicting that the rich will flee.

01:08So let's take a closer look at Mamdani's millionaire tax plan.

01:12What is generally agreed upon is that funding Mamdani's agenda will take money,

01:16and Mamdani has a plan to raise revenues without tapping the middle class.

01:19In addition to bumping up the corporate tax, Mamdani has proposed a 2% tax on what his campaign calls, quote,

01:27the wealthiest 1% of New Yorkers, those earning above $1 million annually.

01:31His platform estimates this so-called millionaire tax will raise $4 billion annually to help fund projects

01:39like universal free early child care, free bus rides, and more affordable housing.

01:45The numbers, Mamdani says, mean that the tax would impact about 34,000 households.

01:51On his campaign website, he said, quote,

01:53That same 1%, he explains, also benefited from a tax cut under President Trump's 2017 Tax Cuts and Jobs Act,

02:09which cut the top marginal rate from 39.6% to 37%.

02:14Mamdani's proposed surtax, the 2% extra tax rate would only apply to earnings over $1 million,

02:20would, Mamdani suggests, make New York's tax more progressive.

02:25The federal income tax system, he points out, is progressive.

02:30With a progressive tax, rates go up as income increases,

02:33but everyone pays the same rate for the same income.

02:36That means that you pay the same 10% as every other person until you hit the top of the bracket.

02:41Then you pay 15% on that income until you hit the top of that bracket, and so on.

02:46New York State has a similar system, with rates ranging from 4% to 10.9% for the 2024 tax year.

02:55However, Mamdani claims that the New York City income tax is essentially a flat tax of 3.9%.

03:01On his website, Mamdani explained, quote,

03:04Under Mamdani's plan, the surtax would be tacked on at the top,

03:15taking an additional 2% of incomes over $1 million, making the tax more progressive.

03:21Mamdani says the plan will work, pointing to millionaire taxes in states like Massachusetts.

03:26In November 2022, Massachusetts voters approved the Fair Share Amendment,

03:32a 4% surtax on personal income exceeding $1 million.

03:36The tax raised $1.8 billion in its first three quarters of collections,

03:41with revenues funding school lunches, transportation, and education.

03:45Some feared that the tax might cause ultra-wealthy residents to flee.

03:50While Massachusetts residents did leave the state in 2021, the year the bill passed,

03:54most were upper-middle-class taxpayers, not millionaires.

03:59That's consistent with historical data.

04:02Massachusetts has been losing individuals across all income levels since 2009,

04:06with more concentrated losses among middle- and high-income earners.

04:10One reason may be housing costs.

04:13As those shot up, lower-cost housing in other states,

04:16combined with remote work opportunities,

04:18may have wooed middle-class residents away from the Bay State.

04:22As for those millionaires?

04:23An analysis of data from the IRS's Statistics of Income program

04:28revealed that the number of tax returns that reported an adjusted gross income

04:32of a million dollars or more in Massachusetts

04:34grew by 36% between 2018 and 2022.

04:39Wealth data from WealthX also indicated that the number of millionaires in Massachusetts

04:44rose by 38.6% between 2022 and 2024.

04:50For full coverage, check out Kelly Phillips' Herbs piece on Forbes.com.

04:57This is Kieran Meadows from Forbes.

05:00Thanks for tuning in.

Category

Transcript

Be the first to comment

Recommended