Hochul and Mamdani's Tax Hike Plan Risks Damaging NYC's Economy

Governor's flip-flopping on taxes and mayor's 'demonizing' of wealthy could drive high-earners out of the city, experts warn.

Apr. 19, 2026 at 2:36am

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A dynamic, fragmented painting depicting a government building in shades of grey and blue, with the structure appearing to be in motion and breaking apart, symbolizing the potential instability and disruption caused by Hochul and Mamdani's tax hike plans.Hochul and Mamdani's aggressive tax hike plans risk destabilizing New York City's economy through their 'demonizing' of the wealthy.NYC Today

New York Governor Kathy Hochul and New York City Mayor Aftab Mamdani are pushing for a new 'pied-à-terre' tax, a surcharge on properties in the city valued at $5 million or more that are not occupied as a primary residence. This move is part of their effort to raise taxes on the wealthy, but critics warn that their 'demonizing' of high-net-worth individuals and corporations could backfire and drive them out of the city, damaging the local economy.

Why it matters

New York has already been suffering from an exodus of high-earners, with the state's tax base being 'eroded.' Hochul and Mamdani's aggressive tax hike plans, coupled with their hostile rhetoric towards the wealthy, risk further accelerating this trend and harming the city's economy, which relies heavily on investments and spending by the affluent.

The details

Hochul has flip-flopped on the issue of taxes, sometimes opposing hikes and other times embracing them. Her latest move to impose a 'pied-à-terre' tax is an attempt to curry favor with the new mayor, Aftab Mamdani, who ran on a platform of higher taxes on the rich. However, experts warn that demonizing wealthy property owners and investors could backfire, as they provide jobs and economic activity in the city. The problem is that City Hall already faces a large budget deficit, and raising taxes further may drive more high-earners to leave.

  • In her 2022 campaign, Hochul suddenly demanded that Republicans 'just jump on a bus and head down to Florida.'
  • After Donald Trump received 43% of the New York state vote in the 2024 election, Hochul put her 'finger in the wind' and decided more tax hikes wouldn't fly this year.
  • Last month, Hochul was 'practically begging the former New Yorkers in Florida she had ordered to leave to please come back and bring their money with them.'

The players

Kathy Hochul

The current Governor of New York, who has a history of flip-flopping on tax issues, sometimes opposing hikes and other times embracing them.

Aftab Mamdani

The new Mayor of New York City, who ran on a platform of higher taxes on the rich and is now pushing the 'pied-à-terre' tax alongside Hochul.

Lee Zeldin

Hochul's Republican opponent in the 2022 gubernatorial election, who came close to defeating her despite her victory.

Ken Griffin

The founder and CEO of Citadel, a large international investment company, who spent $230 million on an apartment in New York City.

Sara Eisen

A CNBC anchor who warned that the 'nasty attacks' on wealthy individuals like Ken Griffin could backfire and make them feel unwelcome in the city.

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What they’re saying

“When I ran for mayor, I said I was going to tax the rich. Today, we're taxing the rich.”

— Aftab Mamdani, Mayor of New York City

“Making him feel unwelcome and demonizing him seems risky.”

— Sara Eisen, CNBC Anchor

What’s next

Wall Street rating agencies have downgraded New York City's outlook from stable to negative due to the large budget deficits, which Hochul and Mamdani's tax hike plans aim to address. However, experts warn that their aggressive approach and rhetoric towards the wealthy could backfire and drive more high-earners out of the city, further eroding the tax base.

The takeaway

Hochul and Mamdani's ideological push for higher taxes on the wealthy, coupled with their 'demonizing' rhetoric, risks damaging New York City's economy by driving out the high-net-worth individuals and corporations that provide jobs, investments, and economic activity. Their approach could kill the 'golden goose' that the city relies on, rather than solving the underlying budget issues.