On Tax Day, Mamdani Taxed the Rich

The mayor, his supporters, and public opinion convinced their previously reluctant governor to agree to a tax on the second (or third, fourth, fifth, etc.) homes of their city’s nonresident rich.

By Whitney Curry Wimbish, The American Prospect

Six months after Gov. Kathy Hochul scolded New Yorkers for telling her to tax the rich, she joined New York City Mayor Zohran Mamdani to do just that.

The two officials instituted a “pied-à-terre tax” on second homes worth over $5 million, a fee that would apply to the ultra-wealthy who “store their wealth in New York City real estate but who don’t actually live here,” Mamdani said in a video announcement of the new tax set to music that sounds like the theme song to Succession.

“They’re able to reap the huge financial rewards of owning property in, dare I say, the greatest city in the world,” Mamdani said, and most of the time the units sit empty. “This is a fundamentally unfair system that hurts working New Yorkers.”

He gave examples of the types of homes he’s talking about, including billionaire Ken Griffin’s $238 million penthouse in Midtown, once the most expensive home in the country, and Russian auto dealer Alexander Varshavsky’s $20.5 million property, which he bought in cash. Mamdani counted “thousands more” similarly opulent homes “owned by foreign oligarchs and the global ultra-rich.”

The new fee would bring in about $500 million annually, less than 10 percent of the city’s projected budget deficit of $5.4 billion. Nonetheless, it’s a crack in Hochul’s stone wall against the idea of applying any new tax against the rich, which she’s maintained for months. At a rally for the Mamdani mayoral campaign in October, New Yorkers chanted “Tax the rich” at Hochul when she took the stage. Initially, she pretended that she thought the audience was yelling “Let’s go, Bills,” in reference to the NFL team from Buffalo. Then she tried other ways to get out of the intensely popular demand, including repeating the lie that taxes on the ultra-wealthy prompt them to leave, which has repeatedly been proven untrue, and saying that having to listen to a repeat request from the constituents she serves is akin to her having to “put up with a lot of crap.”