Mamdani’s ‘Tax First, Think Later’ Budget Plan

By Nicole Huyer & Camilla Cort

Wednesday, May 06, 2026

 

In the wise words of Margaret Thatcher, “The problem with socialism is that you eventually run out of other people’s money” — and New York City Mayor Zohran Mamdani has taken just four months to prove the former U.K. prime minister right. His socialist agenda — including redistributive tax policies to fund existing public programs, free childcare, rent-controlled apartments, and city-run grocery stores — would leave Big Apple taxpayers on the hook for tens of millions of dollars in new spending.

 

Currently, New York City faces a $5.4 billion shortfall against its annual budget of $127 billion. As the city is required to maintain a balanced budget, the mayor has requested that the city council extend the budget deadline from May 1 to May 12, allowing additional time to secure tax hikes and state financial support, rather than reducing spending.

 

In a February X post agitating Albany’s state legislature, Mamdani offered two “solutions” to the city’s fiscal fiasco:

 

One: Albany can raise taxes on the ultra-wealthy and the most profitable corporations and address the fiscal imbalance between our city and state.

 

The other, a last resort: balance the budget on the backs of working people using the only tools at the City’s disposal.

 

Despite his media campaigns posing as a champion for the middle class, Mamdani shows his commitment to communist rhetoric by proposing to hit the middle class just as hard as he slams his primary high-earning targets. He outlined plans to balance New York City’s budget in a recent preliminary budget presentation for fiscal year 2027.

 

The mayor aims to pressure the state legislature and New York Governor Kathy Hochul to raise corporate taxes from 7.25 percent to 11.5 percent (which would be the highest in the nation) and implement a 2 percent wealth tax on millionaires. Mamdani has also presented a so-called last-resort option that would increase the overall property tax rate by 9.5 percent across all classes (residential, commercial, etc.), which would lead to higher costs for renters, homeowners, and small businesses alike.

 

Another proposal floated by Mamdani would cut the estate-tax exemption from $7.35 million to $750,000 (which would be the lowest in America) and increase the top rate from 16 percent to 50 percent, devastating middle-income homeowners. If Mamdani is unable to tax high-income earners and corporations, he will fund his agenda by any means necessary — and that unfortunately means squeezing the middle class.

 

In the Tax Foundation’s 2026 State Tax Competitiveness Index, New York is already ranked dead last for its tax environment. Increasing rates on an overly burdened state would simply encourage capital flight and further population exodus, creating unemployment, inflation, and economic stagnation.

 

The mayor’s question of which taxes to raise and whose money to take is misguided because New York City doesn’t have a revenue problem. It has a spending problem.

 

The city comptroller forecasts a 1.2 percent increase (approximately $1 billion) in tax revenue from fiscal year 2025 to 2026, indicating the problem isn’t revenue, but poor spending management. The Big Apple’s preliminary FY 2027 budget is $127 billion for 8.5 million residents, far larger per capita expenditures than, say, Florida’s $117 billion budget for 23.3 million people.

 

New York City could cut costs by eliminating wasteful social programs, removing ineffective initiatives such as DEI, restricting benefits for illegal immigrants, and reducing fraud in Medicaid, childcare, and food stamp programs. These commonsense objectives would save the Big Apple billions and balance the budget without painfully hiking taxes — because when taxes go up, the city’s tax base goes down.

 

Not surprisingly, a study from the Heritage Foundation finds that between April 2020 and July 2023, high-tax New York lost 880,000 residents to interstate migration. Red states with no or low income taxes, such as Florida and Texas, experienced net population gains.

 

Pro-entrepreneurship, pro-investment, low-tax policies would make New York City an attractive destination and increase government revenue without placing the burden on the “backs of the working people.” If Mayor Mamdani wants to shrink the $5.4 billion budget deficit, bring on an economic boom, and stop hemorrhaging talent, he should cut taxes and learn prudent fiscal management by putting the Big Apple on a spending diet.