Tax wealthy to fill budget deficit

New York City Mayor Zohran Mamdani on Wednesday said the city’s wealthiest must pay more in taxes to help fill the staggering budget deficit of more than $12 billion that he was left by his predecessor.

“This is at a scale that’s actually greater than what we saw here in New York City during the Great Recession,” Mamdani said of that budget hole during an interview with CNBC “Squawk Box” co-anchor Andrew Ross Sorkin at City Hall.

The Democrat, who took office on Jan. 1 after campaigning on a platform of hiking taxes on the rich, attributed the big deficit to “gross fiscal mismanagement.”

He pointed to actions taken by former Mayor Eric Adams, and by ex-New York Gov. Andrew Cuomo, whom he soundly defeated in the November general election, for causing that budget gap.

Mamdani vowed that his administration will be up front with New Yorkers about budget issues that have been “hidden from them for far too long.”

City Comptroller Mark Levine earlier this month said the new mayor faces a budget shortfall that is projected to total $12.6 billion over the next two fiscal years.

That comprises a $2.2 billion projected deficit on the city’s nearly $116 billion budget for fiscal 2026, which ends on June 30, and a $10.4 billion gap in fiscal 2027.

Mamdani on Wednesday said that his plan to address the deficit will also include finding savings in the budget.

He gave the example of the Adams administration launching a “basically unusable” artificial intelligence chatbot that reportedly cost about $600,000 to develop.

“I think the scale of this crisis is one where we have to pursue all of these things,” Mamdani said.

“I have to show that the city government is not just serious about public goods, but also public excellence and public efficiency, and so we have to make sure every dollar that’s being spent is actually being spent in a worthwhile way,” he said.

The 34-year-old former state assemblyman, while campaigning for mayor last year, vowed to raise the city’s corporate tax rate to 11.5%, matching New Jersey’s rate.

He also promised to impose a flat 2% tax on New Yorkers who earn more than $1 million per year.

Mamdani’s sudden rise to prominence after his stunning upset victory over Cuomo in the 2025 Democratic mayoral primary, and his self-identification as a democratic socialist, has caused consternation among some of the city’s business elite.

A number of those leaders warned that his redistributionist agenda could hobble the city, which is the nation’s financial capital.

Asked by Sorkin on Wednesday about fears of an exodus by billionaires, other wealthy people and businesses in the face of his policies, Mamdani pushed back.

“Capital flight is always spoken about whenever we talk about the potential of increasing taxes on the wealthy,” Mamdani said.

He noted that the number of millionaires in New York has increased since the state raised taxes on the wealthy in 2021.

And Mamadni stressed that his revenue plans are aimed at…