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

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.

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.