New York, United States. New York City Mayor Zohran Mamdani called for a 2% tax increase on New Yorkers earning more than $1 million a year and a higher state corporate tax rate during testimony at a state budget hearing. He said the proposals would help address the city’s remaining budget gap.
Tax proposals outlined at state Senate hearing
Mamdani, a Democrat, testified before the New York State Senate’s 2026 budget hearing on Wednesday and said the city’s budget gap has fallen to $7 billion from $12 billion. He attributed the change to “assuming an aggressive posture on savings without compromising city services, incorporating updated revenue and bonus estimates, and using in-year reserves.”
Mayor cites remaining fiscal risk
Despite the reduced shortfall, Mamdani said New York is “placed on a ledge.” He said, “I believe the wealthiest individuals and most profitable corporations should contribute a little more so that everyone can live lives of dignity.”
Details of income and corporate tax increases
Mamdani said he is asking for a 2% personal income tax increase on the most affluent New Yorkers, alongside an increase in the state’s corporate tax rate. He said the 2% income tax increase would resolve nearly half of the city’s budget deficit.
He previously campaigned to raise New York’s corporate tax rate from 7.25% to 11.5%.
Approval required from Governor Hochul
Any tax increases proposed by Mamdani would require approval by Democratic New York Governor Kathy Hochul. A spokesperson for Hochul did not immediately respond to a request for comment.
Hochul, who presented her budget last month, has reiterated her opposition to tax hikes, saying, “We’re able to make transformative investments in our future. Without raising taxes. Without saddling the next generation with mounds of debt.”
What impact would proposed tax increases on high earners and corporations have on New York City’s budget plans?