09 Jul 2025 Bennett Nuss: We’ll All Pay for New York’s Mamdani Folly

In a commentary published by the Wall Street Journal, Free Enterprise Project Associate Bennett Nuss discusses how a socialist takeover in New York City would disastrously affect the rest of the state and even be felt across the nation by taxpayers who would be forced to bail out the failed experiment.

Read Bennett’s entire commentary below.

We’ll All Pay for New York’s Mamdani Folly

The state will lose wealthy taxpayers, and the federal government will have to cough up more aid.

Bennett Nuss

Zohran Mamdani’s victory over Andrew Cuomo in last month’s New York Democratic mayoral primary has generated plenty of discussion. The self-avowed socialist’s plan to build city-run grocery stores, eliminate bus fares, freeze rents on regulated apartments, and increase taxes will have disastrous effects on the city’s economy. Less discussed has been what those policies would do to the rest of New York state—and the country.

Upstate New York has stagnated economically for nearly two decades. Businesses are leaving, driven away by regulatory and tax burdens imposed by Albany. Buffalo, a midsize city, has been unable to provide enough competitively paying jobs to maintain the economic status quo. Younger people are fleeing the state to look for work in parts of the country with more opportunity and a lower cost of living. As New York state’s average population ages, government’s ability to provide state-run services such as Medicaid—and even low-cost electricity—has deteriorated. The young workers who once supported their community’s amenities have taken their important tax dollars elsewhere.

Upstate New York is doing slightly better than its Rust Belt neighbors. The reason is Albany’s redistribution of the tax money collected from the state’s economic powerhouse: New York City. The state uses that money to fund services in rural and midsize metropolitan areas.

Support for Mr. Mamdani derives in part from his promise to freeze rents and tax millionaires. Both proposals would materially harm the city and state. Freezing rents eliminates the rationale for owning a leasable apartment, and the property-tax burden would still fall on real estate holders, making every investment a value loss. Further, freezing rents would undermine the rest of Mr. Mamdani’s agenda. If landlords are losing money, the city budget will suffer from reduced revenue from income-tax collections. The same is true at the state level, jeopardizing crucial funding support for poorer communities upstate.

The proposed tax on millionaires would chase many high earners out of the city and perhaps even the state. Mr. Mamdani has proposed an additional 2% income tax on New Yorkers making more than $1 million a year. A family making that much is now effectively paying a combined total income tax rate of approximately 44%. Cranking that up to 46% may not seem like much, but consider that the same family would pay a 42% aggregate rate in nearby New Jersey. Moving to Florida would bring it down to 34%. With the rise of remote or hybridized work, white-collar workers no longer need to root down in the big city to do their jobs well. If wealthier families leave the state, the total revenue collected by city and state will decrease substantially.

To put it bluntly: Upstate can’t afford a socialist New York mayor. The city pays for most of the services Albany provides.

As goes New York, so goes the nation. The city is already heavily dependent on federal assistance. Its subway system has anticipated requiring $14 billion in federal funding between 2025 and 2029, according to the City Comptroller’s Office, and its fiscal year 2026 operating budget expects $7.4 billion from Washington. If wealthy New Yorkers flee for sunnier climes, the city will need even more federal dollars to stay afloat. Dividing the $7.4 billion request by the 266.6 million tax returns collected by the Internal Revenue Service in fiscal 2024 means that each taxpayer is already on the hook for $27.76 of New York’s budget. Without the stable tax revenue provided by the incomes of affluent households and property owners, one can only imagine how extensive the city’s reliance on federal funding will become. The pain from the policies of an economically illiterate mayor will fall on the average taxpayer.

A Mamdani mayoralty would pervert the function of other institutions of government. The New York City Comptroller’s Office uses the millions of dollars it invests through its pension fund as leverage over the companies in its portfolio. As the city’s chief financial officer, the comptroller regularly uses shareholder proposals to push partisan positions to the detriment of shareholder assets. Policy coordination between City Hall and the comptroller’s office is technically illegal but hardly unthinkable, especially if they are politically aligned.

In short, Mr. Mamdani presents a real economic threat to residents of the five boroughs and their upstate neighbors—and even to the economic well-being of the entire country. Every dollar spent to bail the Big Apple out of a socialist experiment is a dollar that could be spent fruitfully elsewhere. Let’s hope New Yorkers come to their senses and avert a disaster before it happens.

Bennett Nuss is an associate with the National Center for Public Policy Research. This was first published at the Wall Street Journal.