Mamdani’s Utopian Vision Faces Reality

New York City Mayor Zohran Mamdani on Tuesday unveiled his first budget, which came in the form of a threat. Given the deficit he inherited, he warned, if the state does not approve his plans for a destructive wealth tax, the city would be forced to impose a staggering 9.5 percent property tax increase.

The tax, which would hit 3 million residential properties and 100,000 commercial buildings, would immediately increase the housing costs of working-class New Yorkers, regardless of whether they own homes or are renters whose owners pass the taxes onto them. This would represent the abandonment of Mamdani’s “affordability” agenda, of which cheaper housing was one of the core pillars. The mayor isn’t even trying to hide that fact. His own budget document projects that the median income of those affected by the tax hike would be $122,000 — which doesn’t go as far in New York City as it does elsewhere, and of course, half of the people would be below the median.

On top of that, this plan would require raiding the city’s rainy-day fund as well as a health benefits fund for retired city workers.

This “harmful path” would be completely avoidable, he said, if only New York Governor Kathy Hochul and the state legislature would approve his plan to raise taxes on higher-income individuals and corporations. A wealth tax would require approval of the state government, and Hochul, currently running for reelection, has indicated opposition. But the city could hike property taxes on its own.

Aside from the plan being bad policy, Mamdani doesn’t exactly have the leverage he thinks he does. Immediately after he released his budget, the top two Democratic lawmakers on the city council who would have control over property taxes and could have helped make his bluff more convincing poured cold water on the idea.

“At a time when New Yorkers are already grappling with an affordability crisis, dipping into rainy day reserves and proposing significant property tax increases should not be on the table whatsoever,” New York City Council Speaker Julie Menin and finance committee chairwoman Linda Lee declared in a joint statement.

Mamdani’s push for a wealth tax, which has failed whenever it has been tried (never raising the promised revenue and hurting the economy by causing those with more money to move), rests on the fiction that those with means aren’t paying their fair share. But according to an analysis by the Empire Center for Public Policy, “Filers in the top 1 percent — which roughly corresponds to incomes of $1 million or more — accounted for 46 percent of income tax paid and one-third of total state tax revenue in 2023,” which is the most recent year with available data. Meanwhile, according to the state comptroller’s office, on Wall Street’s contribution to New York City specifically: “The securities industry is a major tax contributor to the state and city through business taxes on profits and personal income taxes on employees’ salaries. The industry generated an estimated $6.7 billion in revenue for New York City in fiscal year (FY) 2025, up 35.1% from the prior year, and represented 8.4% of the city’s total tax collections that year.”

If Mamdani is actually concerned about closing the city’s fiscal deficit, an obvious place to start would be to cut spending. Instead, he is proposing increasing the budget by $5 billion to $127 billion. By comparison, Governor Ron DeSantis proposed a budget of $117 billion for the entire State of Florida. This gap exists despite the fact that New York City’s population is 8.5 million and the population of Florida is 23.5 million.

If there is any good that may come out of the Mamdani experiment, it is that it will provide yet another high-profile example of what happens when the grandiose fantasies of utopian socialism encounter reality — and math.

The Editors comprise the senior editorial staff of the National Review magazine and website.

Reprinted with Permission from The National Review – By The Editors

The opinions expressed by columnists are their own and do not necessarily represent the views of AMAC or AMAC Action.