New York’s socialist mayor, Zohran Mamdani, announced this week that he is making good on his campaign promise to tax the rich. Like all socialists, Mamdani claims that the rich do not pay their “fair share,” a claim contradicted by the data.

In effect, wealthy taxpayers pay almost all of the taxes in New York City, while the lower 50% not only pay almost nothing but also receive government benefits. The lower 30% of NYC residents do almost no work. This is supported by Census Bureau data showing that the lowest income quintile in New York City earns a mean household income of just $12,294, equivalent to roughly 14 hours per week at New York’s minimum wage of $16.50, which is already nearly double the federal minimum wage of $7.25.

According to the New York State Department of Taxation and Finance, millionaires paid 44.6% of all personal income tax collected in tax year 2024, while the top 200,000 taxpayers paid 51.9%. Millionaires also accounted for over 75% of all reported capital gains in the state that year. Meanwhile, the bottom 50% of taxpayers paid just 0.2%. According to 2023 data from the NYC Independent Budget Office, the top 1% of city income tax filers paid approximately one-third of all city income tax revenue, with a threshold of at least $906,677 in income.

“When I ran for mayor, I said I was going to tax the rich. Well, today we’re taxing the rich,” Mamdani declared in a video filmed outside 220 Central Park South, where Citadel CEO Ken Griffin owns a four-floor penthouse purchased for $238 million. On April 15, Mamdani and Governor Kathy Hochul jointly announced a pied-à-terre tax, French for “foot on the ground,” an annual surcharge on one-to-three-family homes, condominiums, and co-ops valued above $5 million whose owners maintain a primary residence outside New York City.

Mamdani argued that such properties are often left vacant while still benefiting from rising real estate values, calling the arrangement “a fundamentally unfair system that hurts working New Yorkers.”

Yet the non-resident owners he targets are, by definition, not drawing on city services. The revenue he proposes to extract from them would flow not to working New Yorkers but to welfare programs serving those who don’t work, transferring wealth from tax producers to tax consumers.

“As mayor, I believe everyone has a role to play in contributing to our city,” Mamdani said, adding that “some, a little bit more than others.”

In practice, the $500 million he aims to collect would be extracted from a small number of wealthy property owners to fund services consumed by a far larger population that contributes little to the tax base. In Austrian economics, my academic discipline, this is called wealth redistribution. It is a dangerous feature of socialism that begins the slide toward communism and the abolition of private property.

Mamdani explained that the projected $500 million in annual revenue taken from the wealthy will be directed toward free childcare, street cleaning, and neighborhood safety. But if he wanted safer neighborhoods, he could achieve that goal by arresting and prosecuting criminals, something he opposes.

According to Manhattan Institute fellow Rafael Mangual, Mamdani won his assembly seat in 2020 as part of a far-left contingent for whom “defund the police” and “abolish jails” were core elements of political identity, not empty slogans. In a candidate questionnaire, he stated that his goal is to have fewer people incarcerated before trial and fewer prosecuted overall, and called violence an “artificial construction,” stating at a 2021 protest that “what violent crime is, is defined by the state.” As the endorsed candidate of the NYC chapter of the Democratic Socialists of America, he is tied to a platform seeking to dismantle enforcement of all misdemeanor offenses, end cash bail, cut prosecutors’ budgets, and end imprisonment for parole violations.

On policing, Mamdani has pledged $1 billion to create a Department of Community Safety dispatching social workers instead of police to certain calls, and has stated he does not foresee hiring more NYPD officers. His first budget canceled his predecessor’s plan to hire 5,000 additional officers, keeping the force at just under 35,000. After a mass shooting in Midtown Manhattan in July 2025, Mamdani walked back his earlier position, saying he was “not running to defund the police,” attributing his prior statements to frustration over George Floyd’s murder. He then named supporters of the Defund the Police movement to his transition team and administration, including his director of appointments.

In addition to being soft on crime and personal property, he is also weak on economic policy and budget balancing. The $500 million figure amounts to less than 10 percent of the city’s projected budget deficit of $5.4 billion.

While the tax would penalize successful people to fund expenses that responsible parents normally pay for their children, it still would not be enough to cover the deficit. This is even before Mamdani institutes the rest of his utopian plan for free buses and grocery stores.

Earlier in April, Mamdani released a Preliminary Citywide Racial Equity Plan framing his agenda as shifting tax burdens from outer-borough homeowners to “more expensive homes in richer and whiter neighborhoods.” The plan also proposed an estate tax threshold of $750,000, which would impose a 50 percent state estate tax on homes above that value, potentially raising the combined federal and state rate to 70 percent.

Furthermore, the $500 million projection also assumes that wealthy property owners will simply comply. They have several options to avoid the tax entirely. Owners could spend more time in their New York City properties, establishing residency sufficient to escape the surcharge. They could place tenants, real or nominal, in the apartments, since the tax targets unoccupied units. In fact, it would be cheaper to pay someone to live in the apartment than to pay the tax.

Mamdani has not explained how his administration would determine what constitutes New York City residency, how occupancy would be verified, or how ownership structures, typically layers of LLCs and trusts, would be pierced to establish liability.

The other option is that the wealth could just leave. And many already have, shrinking NYC’s tax base. New York’s share of the nation’s millionaires plummeted 31% between 2010 and 2022. Had that share remained at 2010 levels, the state and city would have collected more than $13 billion in additional personal income tax revenue in 2022 alone.

Each of these responses eliminates the tax revenue Mamdani is counting on while doing nothing to close a $5.4 billion deficit. However, a new tax proposal may allow Mamdani to continue taxing people even after they leave New York.

Legislators in California and New York have proposed “exit taxes” and wealth taxes targeting high-net-worth individuals to offset revenue losses from residents relocating to lower-tax states. These proposals aim to tax individuals based on their worldwide wealth upon departure or continue taxing them for up to ten years after they leave.

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