Mamdani pushes millionaire tax while Hochul signals opposition amid disagreement over revenue strategy
Mamdani Proposes Tax Increase to Close Budget Gap
Mayor Zohran Mamdani has formally called for a two percent income tax increase on New Yorkers earning more than one million dollars annually, alongside a corporate tax rate hike, marking a confrontational opening move in what promises to be a sustained battle with Governor Kathy Hochul over how to balance the city’s finances. The proposal sets up a direct test of the mayor’s political power and his ability to deliver on a signature campaign pledge.
The Revenue Strategy
Speaking before state lawmakers during the 2026 Joint Legislative Budget Hearing in Albany, Mamdani asserted that the city’s budget gap has decreased from twelve billion dollars to seven billion dollars through aggressive savings measures and updated revenue projections. He argued that a two percent tax increase on wealthy individuals would resolve nearly half of the remaining deficit. The mayor also campaigned to increase the state’s corporate tax rate from 7.25 percent to 11.5 percent, a significant jump designed to ensure corporations “contribute a little more so that everyone can live lives of dignity.” Mamdani stated he was “glad to report that by assuming an aggressive posture on savings without compromising city services, incorporating updated revenue and bonus estimates, and using in-year reserves, we have lowered that twelve billion dollar gap to seven billion dollars.”
Governor’s Opposition
Governor Hochul has repeatedly and emphatically stated her opposition to any tax increases in the state. “We’re able to make transformative investments in our future. Without raising taxes. Without saddling the next generation with mounds of debt,” the governor said in her budget presentation. When asked directly if higher taxes might eventually become necessary, Hochul maintained her position: “The answer is still no.” This disagreement reflects fundamentally different philosophies about how to address fiscal challenges. While Mamdani frames taxation of the wealthy as an equity issue and necessary revenue source, Hochul emphasizes restraint and existing budget capacity.
Assembly Minority Leader Critique
Republican Ed Ra criticized both the mayor’s tax proposals and the governor’s spending plans, arguing they reflect a pattern of policy failure. “New Yorkers need real financial relief and meaningful quality-of-life improvements, not more of the same failed policies that defined a decade of one-party rule,” Ra stated. He pointed out that state spending has increased 81 billion dollars over five years while quality of life has declined. He noted that New York ranks 45th nationally for affordability and electricity costs are 49 percent higher than the national average.
Broader Context
The tax increase debate occurs within a broader conversation about New York’s fiscal structure. Wealthy New York City residents already pay the highest income taxes in the country. City residents with incomes above 2.1 million dollars face a combined rate of 14.8 percent, compared to California’s 13.3 percent, the second-highest in the nation. Hochul has previously left the door open to raising corporate income taxes, suggesting some flexibility on that front while maintaining absolute opposition to individual income tax increases.
Competing Visions
Mamdani’s vision for addressing the budget crisis differs sharply from conventional fiscal conservatism. The mayor frames tax increases on high earners as consistent with values of equity and shared responsibility. Progressive organizations have rallied to support this position. The Democratic Socialists of America, of which Mamdani is a member, wrote on social media that “Kathy Hochul will not create an affordable New York unless our movement of millions makes her. It’s time to tax the rich.” Our Time for an Affordable NYC, a nonprofit aligned with Mamdani’s policies, has enlisted volunteers to knock on doors in support of taxing wealthy residents.
Campaign Promises at Stake
Mamdani made aggressive tax increases on the wealthy central to his campaign platform. His administration estimates these revenues are necessary to fund major policy priorities including universal childcare, free buses, and city-subsidized grocery stores. Without additional revenue, these initiatives become difficult or impossible to implement at the scale Mamdani promised. The mayor has already won a significant victory with Hochul’s commitment to help fund two years of universal childcare expansion, a 1.7 billion dollar investment. However, the governor has not detailed a plan for funding beyond the first two years.
Legislative Strategy
Lawmaker response to Mamdani’s tax proposals has been mixed. Some have questioned whether the measures would drive people and businesses out of the city, while others support progressive taxation as a solution to inequality. Evan Stavisky, a longtime Albany lobbyist, noted it makes sense for Mamdani to focus his first Albany session on tax increases, since the mayor intends to use that revenue to fund many city-level programs central to his agenda.
The Road Ahead
The coming weeks will reveal whether Mamdani can generate sufficient political pressure to move Hochul on tax policy. A preliminary budget is due next week, with the formal Executive Budget proposal following this spring. This gives the mayor and his allies time to make their case to state lawmakers and the public. See also: New York State Budget, City Limits Tax Coverage.
