Market Update: Mamdani’s tax hike crusade already hurting NYC economy: biz leader – Full Analysis

The leader of the city’s top business advocacy group warned Sunday that Mayor Zohran Mamdani’s tax-hike crusade is already scaring away investors.

Steve Fulop, CEO of the Partnership for the City of New York, said the democratic socialist mayor’s push to increase taxes to fund his freebie-filled agenda is pushing the “very, very fragile” Big Apple economy to the brink.

Mamdani, who took office in January, is threatening to hike city property taxes by almost 10% unless Gov. Kathy Hochul and the state legislature agree to increase income taxes on the wealthy and also up the corporate tax.

“We have a City Hall that has now proposed four hikes in taxes in two months,” Fulop said during an appearance on 77 WABC radio’s “Cats Roundtable.” “We’ve had an income tax at $500,000. An income tax at $1 million. We’ve had a real estate tax. And we’ve had a corporate tax.

“That type of rhetoric scares away investment,” Fulop told host John Catsimatidis.

The city’s CEOs are talking privately talking about ramping up job production in Texas instead of adding jobs in New York, he said.

“Several of them have said non-publicly that they’re not going to add any new jobs in New York. This is a byproduct of the rhetoric,” Fulop said.

The Partnership recently issued a report showing that New York is losing banking jobs to business friendly, low-tax Texas.

“People like to invest where there’s stability,” Fulop said. “Where they can predict what’s going to happen… When you have people talking about income taxes … And then property, taxes, and corporate taxes, it creates uncertainty. People won’t invest.”

Mamdani and other “tax the rich” advocates argue that wealthy residents won’t leave because of tax hikes. They cite other studies concluding that it’s the working-class and middle-class residents who leave the city because of high costs.

But Fulop, a former Jersey City mayor for 12 years, said even a small number of businesses or people leaving could put New York in hot water.

“You don’t need a lot of the super-wealthy people to leave to have a huge impact on the budget,” he said. “When people say, ‘Everybody’s going to stay.’ Or that ‘They’re bluffing.’ All you need is a handful.”

Mamdani has said the extra revenue is needed to plug a $5.4 billion hole in the city’s massive $127 billion budget.

His proposed package of income tax hikes on the wealthy and corporate tax increases would nearly fill that gap, his administration has said even as the governor has pledged to not raise taxes this year.

Mamdani pitched an increase to the city’s property tax rate by 9.5% as an alternative — with property taxes the only major hike the mayor and City Council can implement without the state government signing off.

Hochul, who is seeking re-election to a four-year term this fall, continues to face pressure from Mamdani even after she chipped in to reduce the city’s budget gap with $1.5 billion in extra funding. She has has also agreed to bankroll the first phase of Mamdani’s universal child care program.

Meanwhile, City Council members — including Speaker Julie Menin — oppose raising the property tax.

“I think the City Council, the speaker [Menin] has been great. She understands it … The governor has been strong. City Hall has a different philosophy as it relates to taxes,” Fulop said.

The Democratic leadership in the state Senate and Assembly has recommended increases in income taxes on millionaires, but the governor, who has enormous leverage in budget negotiations, has rejected such proposals in the past.

Some political analysts say Mamdani’s rhetoric is putting more pressure on Democratic state lawmakers to authorize tax hikes, fearing the wrath from his growing base of democratic socialists and lefty backers.

Former Brooklyn Councilman and mayoral candidate Sal Albanese said “there’s no doubt” that democratic socialist Mamdani’s election has given a boost to the tax the rich campaign long pushed by the DSA and other progressives.

“There’s definitely momentum to raise taxes on the wealthy. Zohran’s election was helpful to that movement,” Albanese said.

He predicted that Hochul would hold the line on taxes until Election Day, but all bets are off if she’s re-elected in November.

“Hochul may pull a Houdini out of her hat and do a tax increase after the election,” Albanese said.