Mayor-elect Zohran Mamdani wants to raise taxes 51 percent on New York City residents making more than $1 million a year. To do that, he’ll need state approval. Will Albany give him the go-ahead to “tax the rich”? A postelection report in the New York Times sounded a cautionary note, describing “raising taxes” as “something lawmakers are typically loath to do.”
In reality, the state legislature’s large Democratic majorities are fully aware that taxes on millionaire earners “poll extremely well,” as Assembly Speaker Carl Heastie put it during the mayoral campaign. Just last March, Senate and Assembly Democrats unanimously approved separate budget packages adding a half-percentage point to the state’s already elevated tax rates on incomes above $5 million. The same legislative measures would have jacked up the state’s top corporate tax rate from 7.25 percent to at least 9 percent.
Governor Kathy Hochul made enough budgetary concessions to sideline those proposals. But in the wake of Mamdani’s victory, Albany’s tax-and-spend fever will spike again—especially in 2026, an election year for the entire legislature and for Hochul. Anxious to avoid primaries and third-party challengers even in the most placid electoral environments, incumbent Democrats will feel intense pressure from the network of well-funded left-wing advocacy groups and labor unions that have made higher taxes on the wealthiest New Yorkers a top priority since the heyday of Occupy Wall Street in 2011.
Mamdani’s platform called for raising the city’s 3.88 percent top income tax rate by a record two percentage points. That’s four times the size of mayoral candidate Bill de Blasio’s proposed increase a dozen years ago, which then-governor Andrew Cuomo deflected by using state money to pay for de Blasio’s pre-K spending plans. Mamdani also wants to see the state’s corporate tax increase to 11.5 percent, tying New Jersey for the highest rate in the country. He’s never gotten around to explaining how the added state revenue would flow to the city government.
While Mamdani’s tax agenda is a tall order even by Albany standards, it’s noteworthy that Democratic leaders aren’t rejecting it out of hand. As Speaker Heastie says, “there will be a robust discussion on revenue raises next year.”
That leaves the governor as the biggest potential roadblock. Hochul’s mid-September endorsement of Mamdani included a disclaimer that she wasn’t “aligned with him on every issue,” taxes being the primary point of difference. “I’m not raising taxes on high net-worth people right now, because we cannot have them leave the state,” she later told the Wall Street Journal.
But Hochul is hardly an anti-tax hardliner. For the express purpose of “ensuring that New York’s highest earners continue to pay their fair share,” her most recent budget included a preemptive five-year extension of the big income tax increase signed into law by Cuomo in 2021, otherwise scheduled to expire in 2027. Taunted by “tax the rich” chants at a preelection Mamdani rally, Hochul failed to make the obvious response: New York City millionaire earners already are taxed at the highest rate in the country.
The relationship between Hochul and Mamdani so far has been friendly, notwithstanding their non-alignment on taxes. But New York governors and New York City mayors tend to find themselves at odds, and this time probably won’t be different.
Mamdani will have considerable political leverage over Hochul through his influence with activist groups capable of sabotaging her 2026 reelection campaign. That’s true both for next June’s likely primary challenge by Lieutenant Governor Antonio Delgado, who’s already running to her left, and for the general election via the Working Families Party (WFP), one of the two New York minor parties with a guaranteed spot on the statewide ballot.
Hochul and her three predecessors as governor all ran for statewide office with WFP support. She will be anxious to keep it that way next year, especially if she faces a strong challenge from a Republican nominee like Rep. Elise Stefanik. (Mamdani made a point of telling reporters on Election Day that he had voted for himself on the WFP line.)
Because the Senate Democratic conference is one vote short of a supermajority, Hochul could veto any standalone city tax hike next year without fear of an override, assuming she had the backing of the Republican minority. That’s why any tax increase Mamdani can wring out of the legislature is more likely to be tucked into an omnibus bill— a “Big Ugly,” in Albany parlance—designed to minimize “no” votes on controversial issues by combining them with dozens of unrelated items supported by regional blocs of legislators in both parties. This would complicate the picture for Hochul.
However, veto fights are also messy, creating hard feelings and uncertainty, so New York’s legislative leaders prefer to avoid them. The last one happened in 2010, pitting Democratic majorities against the lame-duck Democratic governor David Paterson—and the legislature lost.
By late last week, the governor already was reportedly considering a possible increase in the state corporate tax to generate more funds for a universal free child-care program—a multibillion-dollar Mamdani goal that she endorses in principle. Beyond that, if Hochul really wants to “avoid raising taxes on high-net worth people right now,” she should send the legislature a strong, unequivocal signal to that effect at the start of next year’s session. The question is whether she will.
E. J. McMahon is an adjunct fellow at the Manhattan Institute.
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