The mayor skips a “tax the rich” rally to protect his alliance with Hochul but the political pressure is building from every direction
Mamdani’s Tax War Moves to Albany — and Into National View
New York City Mayor Zohran Mamdani’s signature fiscal battle — raise taxes on millionaires and corporations or face a 9.5 percent property tax hike on millions of working New Yorkers — entered its most consequential phase on February 25, 2026, as the fight formally shifted to Albany and the contours of a high-stakes political standoff between the city’s new progressive mayor and Gov. Kathy Hochul became sharper than ever.
The backdrop is a $5.4 billion budget gap that Mamdani inherited from former Mayor Eric Adams, which the new administration has framed as the product of years of fiscal mismanagement rather than structural overspending. To close it, Mamdani is asking Albany to authorize a 2 percent income tax surcharge on New Yorkers earning more than $1 million annually and a corporate tax increase on the city’s most profitable companies. If Albany refuses, he has said he will be “forced” to seek City Council approval for the first major property tax hike since 2003.
The Politico Angle: A Calculated Dance
In a revealing turn, The New York Times reported that Mamdani told organizers of a “Tax the Rich” rally planned in Albany for February 25 that he would likely not attend — out of deference to Hochul, whom he has endorsed for reelection and with whom he has maintained a carefully managed alliance. That decision was notable. The rally was organized by progressive coalition Invest in Our New York, which counts among its most ardent supporters the very activist networks that powered Mamdani’s 2025 mayoral victory.
The mayor’s absence from the rally sent a signal that he is not willing to embarrass Hochul publicly even as he applies budget pressure to force her hand. Political analysts tracking Albany dynamics noted that this is a delicate balance: Mamdani needs Hochul to move, but he also needs her as an ally on federal funding fights, childcare, and housing policy. Burning that relationship for a rally optic could cost more than it gains.
The Governor’s Position: Firm but Fragile
Hochul has repeatedly and publicly stated that she will not raise taxes on high earners this year. She is running for reelection and has cited concerns about wealthy residents leaving the state. “I’m not raising taxes on high net-worth people right now, because we cannot have them leave the state,” she told the Wall Street Journal earlier this year. She did, however, commit $1.5 billion in additional state support to the city as Mamdani was preparing his budget — a significant concession that reduced the gap from $7 billion to $5.4 billion.
That partial concession suggests Hochul is not immune to pressure. But it also establishes a floor: she will give ground incrementally, not dramatically. Mamdani’s challenge is to convert that incremental dynamic into something closer to the structural tax change he campaigned on without triggering a rupture in their relationship that leaves the city worse off. The Citizens Budget Commission, a fiscally moderate watchdog, has argued that both the property tax hike and the millionaire tax are incomplete solutions — that the more important step is identifying city spending that can be reduced without cutting services that working New Yorkers depend on.
The Assembly, the Senate, and the “Big Ugly”
State legislative leaders have been more receptive than Hochul to Mamdani’s tax agenda. Assembly Speaker Carl Heastie has said publicly that taxes on millionaires “poll extremely well” and that there will be “a robust discussion on revenue raises.” Senate Democrats passed standalone millionaire tax legislation last year, only to see Hochul sideline it in the final budget. Any tax increase that Mamdani wins from Albany is more likely to be embedded in an omnibus budget bill — what Albany insiders call a “Big Ugly” — that gives all parties political cover to vote yes on individually controversial items.
That legislative path is narrow but not impossible. The Invest in Our New York coalition has built a significant grassroots pressure operation, and the 2026 state legislative elections give incumbents reason to fear being outflanked on the left by DSA-backed challengers. That dynamic may ultimately matter more than any particular mayoral statement or rally appearance.
The Homeowner Backlash
Meanwhile, the property tax threat has generated fierce pushback from Queens homeowners, particularly in Black communities in Southeast Queens where longtime residents fear being priced out of homes they have owned for decades. Queens Borough President Donovan Richards, himself an Adams-era figure who endorsed Mamdani, called the property tax idea a “nonstarter,” and warned it could trigger a wave of foreclosures in communities that were the national epicenter of foreclosure during the 2008 financial crisis. City Council Speaker Julie Menin said the property tax increase “should not be on the table whatsoever.”
That opposition from within Mamdani’s own coalition complicates the mayor’s leverage. If the City Council will not pass a property tax hike, the threat to Hochul is less credible. And if Hochul refuses to move on the millionaire tax, Mamdani’s options narrow considerably. The June 30 budget deadline is months away, but the political math is already becoming difficult.
The stakes of this fight extend beyond city limits. As City Limits and other policy outlets have documented, the outcome of New York City’s budget battle will signal to progressive mayors across the country whether a tax-the-rich strategy can actually produce results — or whether it is, as critics claim, a rhetorical flourish that ultimately leaves working people holding the bill.
