New York City braces for wealth flight with Mamdani’s political rise

Zohran Mamdani’s primary win in New York City’s mayoral race and proposal to raise taxes on millionaires have touched off fears of a new wave of wealth flight from the city. Yet so far, there is little evidence of a slowdown in high-end real estate or real wealth losses in New York.

Florida real estate brokers say they’ve seen a surge in inquiries from the New York wealthy looking to move to Miami or Palm Beach. Business owners are threatening to leave the city or close. And New York developers, caught in the crosshairs of Mamdani’s rent control platform, have banded together to fund Mamdani’s opponents in the November general election.

At the center of the economic concern is Mamdani’s so-called “millionaire tax.” He’s proposed an additional 2% tax on New Yorkers earning more than $1 million a year. Added to the city’s current top rate of 3.876%, the tax would bring the combined New York City and state tax to 16.776%, by far the highest in the country. The combined federal, state and city rate would be 53.776%.

And New York’s high earners won’t have to go to Florida to avoid the tax. They can simply move to neighboring Long Island or Westchester County or even New Jersey. Unlike New York state, New York City can’t tax people who work in the city but have their primary residence elsewhere.

“New York City can only tax its own residents,” said Jared Walczak, vice president of state projects at the Tax Foundation. “A high earner doesn’t need to give up the convenience of the city, they just need to move outside the five boroughs. Migration across city lines is the easiest.”

Importantly, Mamdani wouldn’t be able to raise income taxes. The city’s income tax rates are set by Albany, where Gov. Kathy Hochul has said she will block any tax hike. “I don’t want to lose any more people to Palm Beach,” Hochul told the New York Post.

Critics also fear Mamdani’s policies toward the police and public safety could make the city even more dangerous, becoming the final straw for many business owners and top earners who were already considering leaving. The top 1% of New Yorkers pay over 40% of the income taxes, so losing even a small number of high earners would set off a downward spiral of lower revenue and lower services and more out-migration.

New York state had a net loss of $14 billion in net adjusted income due to taxpayers leaving between 2021 and 2022, according to the Tax Foundation and IRS data. The city’s revenue from personal income taxes declined between 2022 and 2024, from $16.7 billion in 2022 to $14 billion last year — although they’re still above the pre-Covid levels of $13.4 billion in 2019, according to data from the New York City…