Allies of Mayor Zohran Mamdani in the state Legislature are championing a new bill aimed at empowering him to impose a 25% tax surcharge on corporations operating within New York City. This move reflects the democratic socialist mayor’s ongoing efforts, alongside his progressive supporters, to increase taxes on affluent individuals and large businesses as a means to fund the ambitious, benefit-rich promises highlighted during his 2025 campaign.
In a legislative memo, Assemblywoman Diana Moreno and Senator Kristen Gonzalez articulated their proposal, stating, “This legislation would authorize New York City to charge a surcharge on corporate taxes, allowing the city to increase its corporate taxes should the mayor and City Council deem this necessary and appropriate.” This initiative would grant the city greater flexibility in adjusting corporate tax rates, should such measures be considered essential by city leadership.
Assemblywoman Moreno, who shares Mamdani’s democratic socialist values, assumed his former Assembly seat in Astoria following his transition from the state legislature to his role as mayor. Meanwhile, Senator Gonzalez represents a district encompassing parts of Western Queens, Northern Brooklyn, and the East Side of Manhattan, areas that could potentially be impacted by such tax changes.
The lawmakers argue that the additional revenue generated from a corporate tax could play a crucial role in tackling the city’s affordability issues and enhancing public services for its residents. By targeting corporate taxes, the bill seeks to address financial shortfalls while reinforcing essential city services, aligning with the broader agenda of Mamdani’s administration.
Gonzalez’s district covers parts of Western Queens, Northern Brooklyn and the East Side of Manhattan.
“Revenues generated from a corporate tax could contribute to addressing the affordability crisis and strong public services for residents of the city,” the lawmakers said.
But a summary of the bill does not specify how much the corporate tax hike would raise in revenue, stating it is “to be determined.”
Mamdani said he prefers Gov. Kathy Hochul and the legislature raise the income tax on millionaires or the corporate tax rate to help bridge a multi-billion-dollar gap in his budget plan and finance his ambitious agenda, rather than his “last resort” plan — an unpopular 9.5% property tax hike, which appears dead on arrival in the Council.
“New York City is home to dozens of Fortune 500 companies. Yet, for corporations with over $5 million in annual profits, the corporate tax rate is only 7.25%, significantly lower than neighboring states like New Jersey, which is set at 11.5%,” the lawmakers said.
But business advocates counter that the figures cited by the mayor and lawmakers are wrong.
The city’s top combined marginal corporate income tax rate — which includes other levies such as an MTA corporate surcharge — is already 17.44%, significantly higher than New Jersey, and would rise to 22.48% under Mamdani’s tax hike plan.
“I don’t think the tax conversation is productive because we are going to be 100% higher than New Jersey if we take that proposal,” Steve Fulop, the new CEO of the Partnership for The City of New York, said last week on 77 WABC’s the “Cats Roundtable” program.
“New Jersey’s current corporate tax rate is 11%. If we do what the mayor has recommended, will be at 22% – 100% over New Jersey,” he said during his appearance. “People don’t have to move to Texas or Florida. They can just move a mile away, which is a real risk for the economy here in New York.
“People want to be in New York, but you have to have an economy that’s competitive. We’re getting close to a place that it isn’t,” he said.
Meanwhile, the head of a government budget watchdog group said City Hall and Albany need to trim their big spending, not increase taxes.
“Raising taxes makes New York even more expensive for people we want to come and stay here, people whose taxes support our teachers, cops, libraries, health services and more of what we all need,” Citizens Budget Commission President Andrew Rein said last week.
“New York and its localities are already top of the charts–collecting more taxes per person than anywhere else in the nation.”
Hochul, a Democrat seeking re-election to a second four-year term, said she opposes any broad-based tax increases this year but there are questions if she’d bend to pressure from within her party’s ranks after the November elections.
She’s facing a challenge from Republican Bruce Blakeman, the Nassau County executive.
