Tax the Rich, Chase Them Out, Repeat: How Progressive Math Keeps Blowing Up Blue Cities

Dear New Yorkers: as you know, elections have consequences. But hot air is also one of the potential options. Earlier this week, the New York Times reported, “NYC Mayor Zohran Mamdani calls for tax hike on richest residents, corporations to fix massive $12B budget deficit.”

The Big Apple’s youngest Mayor, in a world-class imitation of a broken record, is stretching liberal stereotypes to the breaking point. “The time has come,” Zohran Mamdani, 33, said, “to tax the richest New Yorkers and most profitable corporations.” The mayor said he never frets about any exodus of the City’s high earners or businesses if there is a tax increase. What, me worry? Mamdani is more concerned about working-class residents leaving because of the high cost of living.

If only he had more taxpayer money to play with! Then, life in the City that Never Sleeps will surely become more affordable. You believe that, right?

🔥 The 5’6” Mayor has stumbled, right out of the gate, over his first construction detour. It takes the form of a $12 billion budget in the City’s $112 billion annual budget. Applying lessons from Politics 101, in what CBS colorfully called “a blaming spree,” Mamdani mostly blamed his predecessor, former Mayor Eric Adams.

“This crisis has a name and a chief architect. In the words of the Jackson 5, it’s as easy as ABC. This is the Adams budget crisis,” Mamdani gushed. “He systematically under-budgeted services that New Yorkers rely on every single day.”

But Mayor Adams wasn’t taking that lying down. He quickly shot back on social media, pointing out that, in 2023, he was ringing alarm bells predicting exactly this outcome. Unfortunately for Mayor Mamdani, the Adams story was widely reported at the time. Headline from Politico, August 2023:

“If we don’t get the support we need, New Yorkers could be left with a $12 billion bill,” Adams said at the time, in a formal address from City Hall. “The immigration system in this nation is broken; it has been broken for decades,” Adams added, declaring: “Today, New York City has been left to pick up the pieces.”

Ruh-roh, Scooby! One of the biggest planks in Mamdani’s policy portfolio is sanctuary status, deleting ICE, and promoting rights of illegal aliens to vote in city elections. The debate exhausts him. “I’m exhausted from waking up each day to news of someone being forcibly removed from their vehicle, their home, or their life. What we need is a sense of humanity,” Mamdani said in a very non-exhausted way just ten days ago.

“I am in support of abolishing ICE,” he added, warming to his theme, “because it’s terrorizing people no matter their immigration status, no matter the facts of the law, no matter the facts of the case.”

Any good Marxist can see that hiking taxes on “rich people” is the obvious answer.

The article explained the collectivist Mayor has two signature policy plans: first, raising the corporate tax rate to 11.5%, and then slapping a 2% city income tax on people earning $1 million or more. Trouble is, he lacks the authority to hike those tax rates, which are powers reserved to Albany.

What Mamdani could do is raise property taxes — the City’s single largest revenue source — but he’s been notably silent on that, which would be the only tax option he could actually deliver on.

Which leads to the little Mayor’s second problem.

🔥 At an unrelated event Wednesday, New York Governor Kathy Hochul nixed any new income taxes. Reporters asked her whether she’d work with Mayor Mamdani to achieve his goal. She said no. “The news flash, maybe you haven’t heard me, is we’re not raising taxes in the state of New York,” she vowed. “So he’ll continue to say what he needs to say, I’ll continue to say what I want to say, and you can report it any way you want.”

Which was mildly strange, because as recently as November, Kathy had said the exact opposite. Reuters, November 14th:

Hey, a gal can change her mind. The article noted that the state has its own $32 billion budget shortfall, and said “the deficit, when coupled with recent federal actions, reached levels not seen since the 2009 economic crisis.” Ouch.

Hochul’s 2026 budget, released this month, included no new taxes. So if you live in New York, you dodged the bullet this year. But progressive politics often requires pivoting. New Yorkers should not count on Hochul’s position sticking.

🔥 While the schadenfreude over Mamdani’s struggles tastes great, there’s a bigger pattern in play. In the wake of Trump’s cuts to blue-state federal aid, several big blue states are practically sprinting to make up the difference by “taxing the rich.”

• In California, progressive groups have either qualified, or are close to qualifying, a 2026 “Billionaire Tax Act” ballot measure to impose a “one‑time” 5% excise tax on individuals and trusts with a net worth of at least $1 billion, covering “all forms of personal property and wealth.” Separate initiatives focus on a recurring wealth, and a general high-earner tax for health care funding, spurring organized opposition from the tech billionaires.
• Last year, Maryland boosted income tax rates on residents earning more than $500,000, explicitly framed as a way to narrow that state’s budget deficit.
• In Connecticut, Democrat lawmakers are musing increased income tax rates on “rich people” earning $250,000 or more (or $500,000 for couples) to offset the expected federal funding cuts. The bills are under heated debate, but have not yet passed.
• In Washington State, after adopting a capital‑gains tax last year, Governor Bob Ferguson (D) now supports a new “millionaire’s tax” of 9.9% on annual income above $1 million, with final details expected in the 2026 legislative session.
• Rhode Island recently passed a new levy on vacation homes valued at $1 million or more, popularly dubbed the “Taylor Swift tax,” aimed at raising revenue from luxury property owners and ‘nudging’ second homes back into the general housing market.

Tax the rich! The problem with this scheme, of course, is that rich people can move. The wealthy are the most mobile of all. They might not like moving —who does?— but they can do it more easily. So I found this next quiet headline instructive. Palm Beach Post, ten days ago:

Wells Fargo is a San Francisco-based company. Years ago, it located its “wealth management” division —the bank’s group focusing on high-net-worth individuals— in New York. This month, the division abruptly relocated to South Florida. The group explained that the move would position the firm’s leadership closer to its “most significant clients” amidst a fast‑growing South Florida wealth hub.

Florida has no personal income tax. Its corporate tax is one of the most limited in the country, and offers the most exemptions; for instance, S-corporations and LLCs are completely exempt.

Over the last few years, South Florida’s millionaire population has doubled, as the region acquired the exciting title of “Wall Street South.” Presumably, these new millionaires didn’t just airboat in from the swamps or appear from thin air. They came from somewhere.

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