New York State Budget New York City

Mamdani’s New Albany Asks: Smaller Corporate Tax Hike, Fees on Pricey Home Sales

The mayor narrowed his big business tax proposal in the hopes of making it easier to pass.

Nick Garber · March 6, 2026

| Photo: Ed Reed/Mayoral Photography Office | Illustration: New York Focus

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New York City Mayor Zohran Mamdani is pitching state lawmakers on a smaller corporate tax increase that his aides hope could stand a better chance in Albany, alongside new proposals to tax expensive homes and to shrink a tax credit for pass-through business owners.

The new plan circulated by Mamdani’s administration in recent days would generate about $1.75 billion a year through tax increases on the city’s corporations and unincorporated businesses. That’s a significant change from the statewide corporate tax hike that Mamdani campaigned on, which he estimated would unlock $5 billion in new annual revenue.

The new asks are more specific to companies that do business in New York City, more tailored to certain industries, and smaller.

Mamdani’s aides believe the new version may be more politically viable as they work to persuade a skeptical Governor Kathy Hochul and win the backing of legislative leaders, according to state lawmakers who were briefed on the proposals.

The plan would raise city corporate taxes by 1.8 percentage points for firms in the finance sector, 1.77 points for other corporations, and 0.4 points for large unincorporated businesses. The mayor also wants to shrink a city tax credit called the Pass-Through Entity Tax, which currently lets some executives, like partners in hedge funds and law firms, use their business tax payments to fully cancel out what they owe in personal income taxes. Mamdani wants to limit that benefit to 75 cents on the dollar — a change the city estimates would generate roughly $700 million a year.

On income taxes, Mamdani is still pushing his original proposal: a two-point increase for filers earning $1 million or more. His office now estimates that would bring in $3 billion in revenue, a billion less than what his campaign had projected.

Beyond those top priorities, Mamdani’s office is supporting a few other revenue-raising proposals, according to a full list obtained by New York Focus. Several would add taxes on expensive real estate: a new 1 percent property tax surcharge on homes worth $5 million or more; a 1 percent tax on cash-only real estate transactions over $1 million; and an unspecified expansion of the existing mansion tax on homes sold for more than $5 million. Those changes would generate about $1.2 billion combined, according to the mayor’s office.

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Mamdani is also backing a longstanding effort to scrap a sales-tax exemption on gold bars and other precious metals, which would produce about $300 million in revenue for the city, according to the mayor’s office. He reiterated his support for several much larger tax proposals championed by the advocacy group Invest in Our New York, including a state-level capital gains tax on incomes above $500,000 and an increased corporate tax rate on companies earning more than $2.5 million per year.

The mayor’s office circulated its revenue proposals in recent days after some lawmakers grumbled that they had few specifics to go on as the Senate and Assembly finalize their respective one-house budget proposals, which will be released next week.

“They’ve been really quiet on the revenue front,” said one state senator who was granted anonymity to discuss the non-public proposals. “People were saying, ‘Oh, the city is asking for all these things,’ but the city hadn’t actually formally asked for anything.”

Mamdani’s office did not respond to questions about the specific proposals. Spokesperson Dora Pekec said in a statement that Mamdani “continues to believe we must address our city’s historic fiscal crisis by ending the drain and raising taxes on the wealthiest New Yorkers and most profitable corporations.”

Andrew Perry, director of fiscal research at the Fiscal Policy Institute, a left-leaning think tank, said the new tax plan appears “more nuanced and balanced” than what Mamdani had campaigned on.

“The campaign pledge was great, it got the point across. This looks more like a good-governing plan,” Perry said. “The backbone of it is the same.”

The changes may do little to appease the Partnership for New York City, the main business group opposing Mamdani’s corporate tax push.

“New York City is already the highest tax environment in the country, and it is being pushed more and more into a place of being less competitive,” the Partnership’s president, Steven Fulop, told New York Focus.

Besides raising revenue, Mamdani is pushing Albany to reduce the city’s obligation to pay for some programs and give it a bigger cut of state aid, in order to fix what he calls an imbalance that worsened during Andrew Cuomo’s governorship. The document lists 11 “cuts and cost shifts” that, if reversed, would restore $2.3 billion a year to the five boroughs.

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Some have been widely discussed, like the loss of roughly $300 million a year from an aid program that the city was cut out of after 2010. Others are more obscure, like a funding cut for the juvenile justice initiative Close to Home that costs the city $40 million, according to the mayor’s office.

Mamdani says raising taxes and shifting some of those costs will help the city close a budget deficit that currently stands at $5.4 billion over two years, down from his initial projection of $12 billion in January. Without help from the state, Mamdani has threatened to raise property taxes by 9.5 percent to close the gap, although City Council leaders, who would need to approve the increase, have said they consider it a nonstarter.

Hochul has ruled out raising income taxes in the state budget, which is due April 1. But she has appeared more open to a corporate tax hike, creating a potential opening for Mamdani.

Fulop’s predecessor at the Partnership, Kathryn Wylde, told New York Focus in January that Hochul’s willingness to raise corporate taxes would depend in part on whether the federal government fully carries out planned health care cuts.

Outside of fiscal policies, the mayor’s office has told lawmakers it has three main priorities for the upcoming state budget: enacting his plan to make buses fare-free; extending mayoral control over city schools by four years; and approving Hochul’s proposal to streamline environmental reviews in order to build housing faster.