New York City Mayor Zohran Mamdani is backing a bold, high-stakes plan that could give him the authority to impose a 25% corporate tax surcharge on city businesses, sparking a fierce debate over the city’s economic future.
According to the New York Post, the proposal, championed by Assemblywoman Diana Moreno and Sen. Kristen Gonzalez, would allow the city to increase corporate taxes “should the mayor and City Council deem this necessary and appropriate,” the lawmakers wrote in a memo summarizing the legislation.
“This legislation could help generate revenues to address the affordability crisis and fund strong public services for New Yorkers,” they added, emphasizing the need to support city residents amid mounting financial pressures.
Mamdani, a democratic socialist, has made raising funds for his ambitious agenda a top priority. He has suggested that income tax hikes on millionaires or corporate rate increases are preferable to his “last resort” plan: a 9.5% property tax increase, which appears unlikely to pass the Council.
“New York City is home to dozens of Fortune 500 companies. Yet, for corporations with over $5 million in annual profits, the corporate tax rate is only 7.25%, significantly lower than neighboring states,” the lawmakers noted, arguing that the city needs to bring its rates in line with broader economic realities.
Business advocates, however, claim the figures are misleading.
Steve Fulop, CEO of the Partnership for The City of New York, said the city’s top combined corporate rate is already 17.44% and would rise to 22.48% under Mamdani’s proposal.
“People don’t have to move to Texas or Florida—they can just move a mile away,” Fulop warned. “We risk driving businesses out of New York with these rates.”
Critics also question the timing and necessity of such a hike.
Andrew Rein, president of the Citizens Budget Commission, said the city and state should focus on trimming spending instead of raising taxes. “New York already collects more taxes per person than anywhere else in the nation,” he noted.
Governor Kathy Hochul, seeking re-election this year, opposes broad-based tax increases for now, though political pressure could grow after the November elections.
Meanwhile, Mamdani’s corporate tax plan continues to stir controversy, pitting his progressive agenda against economic and business realities.
The debate signals a tense showdown over New York City’s budget and the mayor’s ability to balance ambitious social programs with a competitive business climate.
