New York City's Latest Tax Fight Has Real Stakes

Mayor Zohran Mamdani unveiled his first preliminary budget on February 17, 2026, and the centerpiece is a 2% surcharge on income above $1 million. He needs Albany's approval to do it. Governor Kathy Hochul has said no — repeatedly. So Mamdani threatened a 9.5% across-the-board property tax hike instead, calling it the "only tools currently available" to him, according to The City NYC.

Hochul responded that the property tax hike isn't necessary either. These two are publicly feuding while a $1.5 billion state aid package Hochul already granted the city sits on the table.

The political theater is loud. The underlying numbers are louder.

What the Data Actually Shows

The National Taxpayers Union Foundation ran the IRS numbers and found something mainstream coverage keeps burying.

New York's share of the national millionaire population dropped from 12% in 2013 to 8.7% in 2022. In raw terms, the state had 41,520 households reporting adjusted gross income over $1 million in 2013. By 2022 that rose to 69,780. Sounds like growth. It isn't — not relatively.

The rest of the country grew faster. Had New York simply held its 2013 share, it would have had 95,812 millionaire filers in 2022. The NTU Foundation calculates that gap costs New York at least $12.2 billion in annual revenue. That's not a rounding error. That's a structural hole.

For context, one millionaire in New York pays roughly the same in taxes as 100 middle-class earners, according to NTU Foundation's analysis. Losing 26,000 of them isn't a footnote — it's a budget crisis.

The Pro-Tax Side Is Also Cherry-Picking

Time magazine ran a February 2026 piece by Christopher Marquis and Nick Romeo arguing the "millionaire exodus" narrative is overblown panic built on anecdote and bad methodology.

They're not entirely wrong. They cite a Fiscal Policy Institute study — headed by Nathan Gusdorf, who openly supports Mamdani's plan — finding no significant out-migration from New York following tax increases in 2017 or 2021. They note that data firm Altrata counted over 33,000 New Yorkers worth $30 million or more as of 2025. Still rich people here. Still plenty of them.

But the Time piece makes the exact error it accuses others of making. It focuses on absolute counts — "more millionaires than before" — while ignoring relative share. Yes, New York has more millionaires than a decade ago. So does every state, because the economy grew and inflation happened. The question is whether New York is keeping pace. It is NOT.

Quoting the Fiscal Policy Institute as neutral analysis is also a problem. Gusdorf's organization explicitly advocates for Mamdani's tax policy. That doesn't make the research wrong — but Time presented it as independent evidence. It isn't.

The Middle Ground

Andrew Rein, president of the Citizens Budget Commission — a business-funded fiscal watchdog that opposes Mamdani's plan — told The City NYC: "No one should believe that suddenly people and businesses will leave in droves tomorrow if taxes are raised. But doing so does chop away at our competitive foundation over time."

The exodus isn't a cliff. It's erosion. Nobody wakes up the morning after a tax hike and moves to Florida. But over a decade, the math compounds. New York has already lost ground against the national trend during a period when tax burdens were already crushing. Piling on more isn't obviously catastrophic — but pretending it's costless is fantasy.

Governor Hochul apparently understands this. She's been publicly begging "patriotic millionaires" to come back from Florida, according to NTU Foundation's reporting. That's a governor acknowledging out-loud that the flight is real. Meanwhile, her own mayor is designing policy that accelerates the same trend she's trying to reverse.

What Mainstream Media Is Getting Wrong

Left-leaning outlets are running with the "millionaires won't leave" framing as settled science. It isn't. The Fiscal Policy Institute studies cover short-term migration after specific tax changes — they don't address the decade-long structural shift in millionaire share that NTU Foundation documents.

Right-leaning outlets are treating the $12 billion gap as proof taxes caused the exodus. That's also a leap. Correlation isn't causation. Cost of living, remote work, COVID, and quality-of-life factors all drove relocations. The data shows New York is losing ground. It doesn't prove taxes are the sole reason.

What This Means for Regular New Yorkers

If Mamdani gets his millionaire surcharge and the skeptics are right, wealthy residents accelerate their exit, tax receipts drop further, and the middle class eventually absorbs the gap through higher property taxes and reduced services.

If Mamdani gets blocked and the pro-tax side is right, New York leaves billions in available revenue uncollected while slashing services that working-class residents actually depend on.

Both outcomes are bad for the same people: the ones who can't afford to move to Florida regardless of what Albany decides.

New York already has the data on what a decade of high taxes and declining millionaire share looks like. The answer is a $12 billion annual shortfall and a governor begging rich people to come home. Whether more taxes fix that or make it worse is the central question.