Allies of Mayor Zohran Mamdani in the state Legislature have introduced a proposal that would empower New York City to levy an additional 25% surcharge on corporate tax liability, a move that would significantly expand the city’s authority to raise revenue from businesses.

The legislation reflects the Democratic socialist mayor’s broader push to increase taxes on corporations and high earners to fund a series of costly initiatives promised during the 2025 campaign.

“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,” said Assemblywoman Diana Moreno and Sen. Kristen Gonzalez in a memo summarizing their legislation.

Moreno, who is also aligned with the Democratic Socialists, succeeded Mamdani in representing Astoria in the Assembly after he vacated the seat to assume the mayoralty.

Gonzalez represents areas that include western Queens, parts of northern Brooklyn and Manhattan’s East Side.

“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.

The bill summary, however, does not estimate how much additional revenue the surcharge might produce, instead noting that the fiscal impact is “to be determined.”

Mamdani has indicated that his preference is for Gov. Kathy Hochul and the Legislature to raise taxes at the state level—either by increasing the income tax on millionaires or boosting the corporate tax rate—to help close a multibillion-dollar shortfall in his proposed budget and bankroll his policy agenda. He has described a 9.5% property tax increase as a last-resort option, one that appears to lack sufficient support in the City 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.

Business advocates dispute that comparison, arguing that it does not account for additional levies already imposed on companies operating in the city.

They note that when other charges, including an MTA corporate surcharge, are factored in, the city’s highest combined marginal corporate income tax rate currently stands at 17.44%, exceeding New Jersey’s rate. Under Mamdani’s proposed increase, they contend, that figure would climb to 22.48%.

“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.

Andrew Rein, president of the Citizens Budget Commission, also urged restraint, arguing that the focus should be on reducing spending rather than increasing 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.”

Gov. Kathy Hochul, who is running for re-election to a second term, has said she does not support broad-based tax increases this year. Still, observers note that it remains unclear whether she would maintain that position if faced with pressure from members of her own party after the November elections.

Hochul is being challenged by Republican Nassau County Executive Bruce Blakeman.

{Matzav.com}