On Tuesday, New York City Mayor Zohran Mamdani laid out two possible paths to closing a $5.4 billion budget gap next year, both of which involve tax hikes.
The first – his preferred method – would include a personal income tax rate hike of two percentage points on people making over $1 million annually, as well as a corporate tax hike. The second – which he described as a “last resort” option – would include a 9.5% increase in the overall property tax rate in New York City.
Those figures shouldn’t be understood in the same way. Though Mamdani has at times described his income tax proposal as a 2% increase – “I’m asking for a 2% raise in personal income taxes on the most affluent New Yorkers,” he said on Tin Cup Day – it would in fact be an increase of two percentage points, or a roughly 52% increase in what those New Yorkers are paying in city income tax. Per city budget officials, the city income tax rate would rise from about 3.88% to 5.88% under Mamdani’s millionaire tax proposal. (Mamdani has at other times described it more clearly. During the campaign, he called for a new, flat 2% tax on people making $1 million or more annually, which would equate to paying $20,000 more in taxes for those who make exactly $1 million.)
Property tax rates vary, but Mamdani has proposed raising the city’s average rate from 12.28% to 13.45%, according to his financial plan.
The confusion is perhaps unintentional, but it does have the effect of minimizing the tax on the rich Mamdani is proposing – “Come on! It’s just 2%! No big deal!” – while the higher 9.5% figure inflates the threat of higher property taxes – “Watch out Kathy Hochul, people are going to be pissed about this!” Both serve Mamdani’s political narrative.
A spokesperson for City Hall did not comment when asked if the alternative tax hike pitches have been misleading. But the mayor’s office has characterized an additional 2-point tax for a class already facing a combined city, state and federal tax rate of 45% as relatively small.
Ana Champeny, vice president for research at the fiscal watchdog group Citizens Budget Commission, said that she didn’t see a problem in how Mamdani has presented the tax proposals, noting that the nuances of how the city’s property tax is assessed could make it simpler to describe it as a 9.5% increase.
