New York Governor Kathy Hochul is facing pressure from Democratic Socialists of America (DSA) and left-leaning politicians to support the tax hike proposal, advocating for the endorsement of Zohran Mamdani, the incoming Mayor of New York City, and his free welfare policies. These policies include raising taxes on the wealthy and corporations to fund childcare, free public transportation, and expanding housing construction. Supporters are warning that if Hochul does not back the related legislation, she may face challenges from within her own party in next year’s gubernatorial election.
On November 16, DSA held a “Tax the Rich” rally at Union Square in Manhattan, emphasizing Mamdani’s victory in the mayoral election as a mandate from over a million voters to pursue the tax agenda. Jabari Brisport, a state senator from Brooklyn, mentioned at the rally that he had tried twice to collaborate with Hochul to promote universal childcare policies but was rejected both times.
Mamdani is pushing for the state government and legislature to increase income taxes on the wealthy and corporate taxes to raise funds for initiatives like universal childcare, free buses, and expanding housing supply. Despite endorsing Mamdani in the general election for mayor, Hochul has stressed the need to “hold the no-tax line,” leading to significant differences between the two sides.
Recently, some state lawmakers have started pushing tax bills. State Senator John Liu and State Assembly Member Phara Souffrant Forrest introduced a bill allowing New York City to impose a 2% surtax on individuals earning over $1 million annually. For a taxpayer earning $1.5 million, this would mean paying an additional tax on the portion exceeding the threshold of $500,000. The two legislators estimate that the new tax could generate up to $4 billion annually to enhance healthcare, housing, childcare, transportation, and other public services.
Mamdani is also advocating for raising the state corporate tax from the current 7.25% to 11.5%, making New York and New Jersey the states with the highest corporate taxes in the United States. Business leaders have warned that increasing the corporate tax will impact New York’s competitiveness. Steven Fulop, the Mayor of Jersey City who is set to become the CEO of the business elite organization “Partnership for NYC,” bluntly stated that this policy would be detrimental to New York City, as businesses there already pay other taxes. If the corporate tax rate is raised, their overall tax rate would reach 16%.
Both Governor Hochul and the business community in New York have expressed opposition to increasing the corporate tax.
As Hochul prepares to face the upcoming gubernatorial election next year, where she is expected to compete against Republican Congresswoman Elise Stefanik, her policy choices on the tax system have become a crucial political issue in the run-up to the election, amid increasing pressure from the left wing within her party and strong resistance from the business sector.
According to the New York Post, analysts in the political arena believe that Governor Hochul’s support for Mamdani has to some extent bolstered the left-wing political forces. Currently, any political figure who does not align with the policy goals of Democratic Socialists of America (DSA) may face challenges from the DSA.