Zohran Mamdani’s Tax-Hike Gamble

Good morning:

Last week, New York City Mayor Zohran Mamdani released a $127 billion preliminary budget proposal. To help close a projected $5.4 billion revenue shortfall over the coming two fiscal years, Mamdani is relying on a 9.5% increase in city property taxes, drawing down $1.2 billion from NYC’s “rainy day” fund, and using $229 million from the Retiree Health Benefit Trust.

The democratic socialist mayor’s plan would put immense pressure on working- and middle-class homeowners in the city, but he seems to hope, writes senior fellow Nicole Gelinas, that the threatened increase in property taxes will strongarm Governor Kathy Hochul “into supporting his proposed tax increases on seven-figure earners and large corporations instead.” In City Journal, Gelinas shows how the fun-and-free sheen is wearing off the new mayor and is being replaced by gloom-and-doom theater.

To have any hope of making good on his multibillion-dollar campaign promises for free buses, universal child care, hundreds of thousands of additional affordable-housing units and more, Mamdani needs to focus on growing the economy and tax base by making the city more attractive to large firms and high earners, director of Cities John Ketcham writes in the New York Post. Collecting revenue isn’t the problem—unnecessary city spending is.

The problem is likely to get worse before it gets better, suggests senior fellow Christopher F. Rufo in City Journal. The Left is moving away from race, sex, and culture issues in favor of economic ones. Mamdani copycats, like James Talarico in Texas and Graham Platner in Maine, are using frustration about inflation, housing, education, and issues under the “affordability” umbrella to stoke class resentment and conflict. Eventually, financial woes like unsustainable debt and uncontrolled printing will come to a head. The Right needs to develop a coherent response before it does.

Elsewhere in this newsletter, director of Constitutional Studies Ilya Shapiro weighs in on the Supreme Court’s decision on President Trump’s tariff policy. The ruling is narrow, Shapiro writes in the New York Post. The court did not say the president lacks authority to impose tariffs, only that the law used in this case does not authorize these particular tariffs.

Finally, we released new research this week by Renu Mukherjee on Chicago’s selective enrollment high schools. The current mayor of Chicago is threatening to close the city’s selective public schools because of their supposed underrepresentation of Hispanic and black students, but Mukherjee shows that these schools close the achievement gap for such students, have been and are supported by parents in these groups, and are actually cheaper than regular public schools.

Continue reading for all these insights and more.

Kelsey Bloom

Editorial Director

Selective Success: A Comparative Analysis of Chicago’s Selective Enrollment and Public High Schools

By Renu Mukherjee | Manhattan Institute

For years, progressive activists and teachers’ unions have claimed that selective enrollment high schools discriminate against minorities, drain resources from public schools, and deepen educational inequality. In a new Manhattan Institute issue brief on Chicago’s selective enrollment high schools, Renu Mukherjee shows why these claims don’t hold up.

Drawing on Illinois Board of Education data, Mukherjee finds that selective enrollment schools are both diverse and high performing. Nearly 70% of students are black or Hispanic, and at least one-third are low-income. Achievement gaps in ACT English and math—between black and white, Hispanic and white, and low- and non-low-income students—are dramatically smaller in the city’s top selective schools than across Chicago Public Schools (CPS) overall. Meanwhile, CPS spends an average of $3,285 more per student in nonselective schools than in the top eight selective schools—while producing worse results.

Far from entrenching inequity, Mukherjee argues, selective enrollment schools function as lifelines for academically gifted students—especially those from disadvantaged backgrounds—and should be strengthened, not dismantled.

How Mamdani’s Tax-Hike Mania Could Make His Budget Gap Grow BIGGER

By John Ketcham | New York Post

“Mayor Zohran Mamdani has painted himself as the unfortunate victim of a historic budget crisis, but he really should be counting his lucky stars.

“New York City has a big spending problem, but not a revenue problem. Yet that could change soon — warning signs are already flashing.

“Mamdani isn’t confronting an external economic shock like a recession, 9/11, the financial crisis or COVID-19. Wall Street is doing fine; the taxes on its stellar bonuses made $5 billion of the city’s budget gap disappear overnight.

“As much as the mayor would hate to admit it, he needs Wall Street more than it needs him. … If Mamdani doesn’t knock off the tax-hike nonsense and start getting the basics right, the next downturn won’t just expose the city’s economic fragility — it will define his administration.”

Trump Has Lost the Tariff Battle but Not the Tariff War 

Tax the Rich—Or Mamdani Will Tax You All

Class Warfare Returns

By Christopher F. Rufo | City Journal

“The Left’s focus permanently rotates between race, sex, and class. The activist Left drives the movement along one axis. Then, as Americans tire of those arguments, activists shift to the next axis, retreating from unpopular positions and rewarding the next interest group. Everyone gets his or her turn. …

“New York City mayoral candidate Zohran Mamdani was the first on the scene. He quietly toned down his race and gender rhetoric … in favor of Leninist agitation about the ‘billionaire class’ and the ‘warmth of collectivism.’ His victory spawned class-warrior copycats. …

“Progressives in California have proposed seizing 5 percent of the total assets of every billionaire under the state’s jurisdiction. Democrats in my home state of Washington have introduced a 9.9 percent tax on income over $1 million, though the state constitution prohibits a graduated income tax. Price controls are even making a comeback.

“This new offensive has found the Right unprepared.”

Who We Are: Homelessness Crisis

 By Manhattan Institute

Stephen Eide and Rafael Mangual sit down for a hard-hitting conversation on homelessness, mental illness, and the policies shaping America’s cities. The discussion explores the breakdown of family support systems, the limits of government intervention, and the thorny questions surrounding institutionalization and public safety.

Eide argues for a more realistic, balanced approach—one that confronts the realities of serious mental illness while pushing for practical, effective reforms.

For more information and media requests, please contact 

communications@manhattan.institute.

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