New York Mayor Mamdani’s ally in Albany recently introduced a bill proposing to authorize the city of New York to levy a maximum 25% corporate tax “surcharge” on businesses to increase the city’s revenue. This move represents the latest fiscal policy action from Mamdani’s camp and has sparked a new round of controversy over corporate tax burdens.
According to the New York Post, State Assemblywoman Diana Moreno and State Senator Kristen Gonzalez proposed allowing New York City to impose a surcharge on corporate income tax when deemed “necessary and appropriate” by the mayor and city council.
The two lawmakers stated that the revenue generated from the corporate tax surcharge could be used to address the city’s affordability crisis and support public service expenditures. However, the bill summary does not explicitly mention how much revenue increase is expected, only labeling it as “to be determined.”
During his 2025 election campaign, Mamdani pledged to expand several public welfare programs. Faced with a budget deficit of billions of dollars, he suggested that the preferable approach would be for the governor and state legislature to raise income taxes on the wealthy or corporate tax rates, rather than resorting to the “last resort” of raising property taxes by 9.5%. The proposed property tax hike is currently facing strong resistance within the city council and is considered “almost impossible to pass” by outsiders.
Supporters point out that New York City is home to dozens of Fortune 500 companies, yet businesses with annual profits exceeding $5 million are subject to a basic corporate tax rate of only 7.25%, lower than neighboring New Jersey (11% to 11.5%). Therefore, they argue that there is room for tax increases.
However, business groups have raised doubts about the above claims. Critics argue that when factoring in other taxes like the Metropolitan Transportation Authority (MTA) corporate surcharge, the maximum comprehensive tax rate for New York City businesses already stands at 17.44%; if Mamdani’s proposal is implemented, it would rise to around 22.48%, significantly higher than New Jersey.
Steve Fulop, the newly appointed CEO of the business group “Partnership for NYC,” stated on ABC Radio that if the mayor’s proposal is implemented, the corporate tax rate in New York would reach around 22%, nearly double that of New Jersey.
“Firms don’t have to move to Texas or Florida, just across a river,” Fulop said. “People want to stay in New York, but the economy must remain competitive. We are approaching a critical point of losing competitiveness.”
The chairman of the non-profit budget oversight agency, the Citizens Budget Committee (CBC), stated that both the state and city governments should prioritize controlling expenditures rather than raising taxes. New York and its local governments already have some of the highest per capita tax burdens in the country, “increasing the tax burden will only make New York more expensive, weakening its ability to attract and retain taxpayers.”
Hochu, currently seeking reelection, opposes implementing any “broad-based tax hikes” this year. However, as the November election approaches, there is speculation about whether she will adjust her stance under internal party pressure.