New York’s Wealthy Fear Mamdani’s Tax Plans May Spark Exodus

New York’s wealthiest residents are expressing concern over the potential mayoral candidacy of Zohran Mamdani, a leftist politician known for his tax-the-rich proposals aimed at improving basic services for working people. Mamdani, a 33-year-old assemblymember from Queens, has taken a commanding lead in the city’s Democratic primary, focusing his campaign on the cost of living and suggesting initiatives such as city-run groceries, free buses, and child care. This has sparked alarm among the city’s business elite, who view his platform as a significant threat to their interests.

Kathryn Wylde, CEO of the Partnership for New York City, described the business community’s reaction as a mix of surprise and deep concern. She noted that many business leaders are unfamiliar with Mamdani and have formed their opinions based on his campaign rhetoric and negative advertisements. Billionaire hedge-fund manager Bill Ackman even offered to fund a candidate to run against Mamdani, suggesting that his mayoralty could lead to an exodus of the ultra-rich. John Castimatidis, owner of the grocery chain Gristedes, floated the idea of moving his corporate offices to New Jersey, while financial analyst Jim Bianco accused New York of “electing to commit suicide by Mayor.” Governor Kathy Hochul, positioning herself as a pro-business moderate, preemptively rejected the idea of tax hikes, stating, “I don’t want to lose any more people to Palm Beach.”

However, history suggests that such threats of an exodus are often overstated. In 2013, Bill de Blasio won the mayoralty on a similar tax-the-rich platform, initially spooking high-income New Yorkers. De Blasio met with industry leaders to win their support, and the tycoons stayed, along with Wall Street’s inhabitants. De Blasio’s universal pre-K program proved to be an economic game changer and helped reduce income inequality. Recent years have seen high-profile examples of billionaires leaving northern states for Florida or Texas, but these moves are often driven by lifestyle factors rather than taxes alone.

The reality is that relocating involves many factors, including what a location offers and its cost. New York’s attractiveness lies in its excellent labor market and human capital, which companies and employees value. High taxes are a consideration, but so are other factors. New York City collects an average of $12,751 per capita in state and local taxes, significantly higher than the national average. Increasing taxes further would heighten the risk of relocation for both individuals and businesses.

While not all businesses can physically relocate, New York’s real-estate sector fears that Mamdani’s proposed rent freeze could lead to a mass exodus of capital. Kenny Burgos, CEO of the New York Housing Association, argued that further rent restrictions would affect landlords’ ability to pay for repairs, making 40% of the city’s properties unaffordable and ultimately causing property owners to abandon them. This scenario could lead to vacant, deteriorated buildings, similar to the situation in the Bronx during the seventies and eighties. The city and tenants would then be forced to take over much of the housing stock, leading to the creation of low-cost apartments.

Partnership for New York City CEO Kathryn Wylde encouraged members to focus on the facts, noting that much of Mamdani’s agenda requires state legislative approval. A mayor cannot, for example, raise corporate or income taxes. Partnership members plan to meet with the candidate, to which he is “very open.” Progressive economist Paul Krugman believes the possibility of a crime-fueled doom loop accelerating New York’s deterioration is overstated. Compared to the crime-ridden eighties, New York is now one of the safest places in America. Krugman argues that New York’s main problem is affordability, and while the success of Mamdani’s proposals can be debated, affordability has been his main focus.