Democratic Socialist mayoral candidate Zohran Mamdani’s sweeping proposal to fund $10 billion in city benefits through steep tax hikes on corporations and the wealthy is drawing sharp criticism from business leaders and experts, who warn it could accelerate the ongoing exodus of residents and businesses from New York City.
According to the New York Post, Mamdani, who has surged in recent polls and is now the main challenger to former Governor Andrew Cuomo in the Democratic primary, has laid out a progressive agenda that includes free public transportation, universal childcare, a rent freeze, and the creation of five city-run grocery stores. To pay for these initiatives, Mamdani proposes raising the corporate tax rate from 7.25% to 11.5%, which he estimates would generate $5.4 billion annually, and implementing a new 2% flat tax on the city’s wealthiest residents, bringing in another $4 billion.
However, business groups and fiscal experts, including a spokesperson for the Business Council of New York State, argue that these measures could backfire by driving high earners and corporations out of the city, further eroding the tax base at a time when New York is already losing residents and income to other states.
Kathryn Wylde, CEO of the Partnership for New York City, also criticized Mamdani’s plan, suggesting it could plunge the city into deeper financial trouble by overlooking the already substantial tax burden on businesses and wealthy individuals.
“Mamdani is following a well worn political mantra that argues for more government spending as the solution to every problem and expecting that taxes on business and the wealthy can be infinitely expanded,” Wylde said, adding that “this may get someone elected, but once in office they bump into reality.”
“His tax proposals all require the approval of the governor and state legislature, which is unlikely even if they were modest increases. I am not sure how seriously he takes his own rhetoric,” Wylde further explained.
Despite these warnings, Mamdani’s campaign has gained momentum, positioning him as a leading progressive voice in the race for City Hall. With the Democratic primary set for late June, the debate over how to pay for ambitious social programs, and the potential economic consequences, remains a central issue for voters.
