Mayor Mamdani Proposes Tax Hike on NYC's Wealthy and Corporations to Close Budget Gap
NEW YORK, Feb 11 (Reuters) – In a move setting the stage for a potential clash with state leadership, New York City Mayor Zohran Mamdani on Wednesday urged state lawmakers to approve new taxes on high-income earners and corporations, framing the proposals as essential for maintaining city services and achieving long-term fiscal stability.
Testifying before the New York State Senate's 2026 budget hearing, the Democratic mayor outlined a financial landscape where the city's projected budget gap has been reduced from $12 billion to $7 billion through aggressive cost-saving measures and revised revenue forecasts. However, Mamdani warned that New York remains financially precarious. "We are placed on a ledge," he stated.
"I believe the wealthiest individuals and most profitable corporations should contribute a little more so that everyone can live lives of dignity," Mamdani said. His plan calls for a 2% surcharge on personal income over $1 million for city residents and an increase in the state corporate tax rate from 7.25% to 11.5%—a key promise from his campaign. He estimates the personal income tax increase alone would address nearly half of the remaining city deficit.
The proposals face a significant hurdle in Albany. Democratic Governor Kathy Hochul, who presented her own budget last month reiterating a "no new taxes" stance, would need to approve any changes. "We’re able to make transformative investments in our future without raising taxes," Hochul said recently. A spokesperson for the governor did not immediately respond to a request for comment on Mamdani's latest appeal.
The mayor is expected to release the city's preliminary budget next Tuesday, which will provide further detail on how the new revenue would be allocated.
Voices from the City
Michael Chen, Financial Analyst in Midtown: "This is a necessary recalibration. The city's revenue structure hasn't kept pace with the concentration of wealth at the top. Targeted measures like this can shore up essential services without broadly impacting the economy."
Eleanor Vance, Small Business Owner in Brooklyn: "I'm torn. We need stable city services, but constantly raising taxes on 'the wealthy' feels like a punitive shortcut. Many of my clients are successful professionals who already feel squeezed. This could accelerate relocation to lower-tax states."
David Park, Community Organizer in Queens: "It's about time! For decades, the burden has fallen on working families while the ultra-rich and big corporations get sweetheart deals. Mamdani is finally calling their bluff. This isn't just about a budget gap; it's about justice."
Sarah Jennings, Retired Teacher in the Bronx: "The governor's refusal to even consider this is infuriating. Where does she think the money for schools, subways, and affordable housing will come from? Magic? We're on a 'ledge' because of decades of coddling the rich. Mamdani gets it."