New York City Mayor-elect Zohran Mamdani’s first big proposal is a bold plan to raise taxes on the city's highest earners by pushing for a two-percentage-point tax increase on income above $1 million.
His incoming administration says this tax move could raise billions a year. He then plans to redirect that revenue into programs the city has struggled to fund for years, including free bus service and major affordable housing initiatives. That projection wouldn't pan out, of course, if millionaires leave the city to avoid the tax.
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Will the Wealthy Stay?
"Tax policies just really don't drive relocation decisions," Kamolika Das, local policy director at the Institute on Taxation and Economic Policy, told USA Today. "They've been claiming this for a long time, and there's just very scant evidence to support it."
Her point cuts against a common argument from critics who believe taxing millionaires is risky in a city where the tax base is heavily dependent on high earners. They're worried that if taxes go up too much, the wealthy might just leave the city. However, according to Das, higher taxes don't generally prompt wealthy people to move.
Supporters of the plan also believe that New York's wealthy won't abandon the networks, cultural capital, and business advantages the city offers just because of a slightly higher tax bill. That said, there are still some risks. A small percentage of taxpayers contributes a disproportionate amount of the city's income-tax revenue. Losing even a sliver of that group could create budget gaps.
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For decades, New York has catered to its financial elite, often shaping policy to retain and attract them. Mamdani's plan challenges that long-standing dynamic and asks whether a different balance is possible. One where wealthy residents contribute more so the city can invest in services that benefit everyone else.
At the end of the day, whether the proposal succeeds will depend on Albany, New York’s state government, since major tax changes require state approval.
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