Mayor Zohran Mamdani’s push to hike New York’s corporate tax — if enacted — could cause an exodus of firms and residents across the Hudson to New Jersey, the head of the Big Apple’s top business group warned.
“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. 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,” Steve Fulop, the new CEO of the Partnership for The City of New York said Sunday on 77 WABC’s the “Cats Roundtable” program.
“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 told host John Catsimatidis.
Fulop knows the competitive dynamics between New York and New Jersey well. He’s the former mayor of Jersey City just across the Hudson River, where many residents pay cheaper rents and commute to jobs in Manhattan via the PATH train.
Mamdani has said his recommended corporate tax rate hike from 7.25%. to 11.5% would equal New Jersey’s.
But New York City’s top combined marginal corporate income tax rate — which includes other levies such as an MTA corporate surcharge — would rise from 17.44% to 22.48%, if Gov. Kathy Hochul and the legislature approve Mamdani’s recommended hike to help close a multi-billion dollar shortfall and fund his ambitious free stuff agenda, Fulop said.
During the campaign, Mamdani said New York’s corporate tax rate has also fallen over time, from 12 percent in the mid-1970s to 10 percent in the mid-1990s, to just 6.5 percent in 2014 as a result of former Gov. Andrew Cuomo’s corporate tax cut and lower than neighboring states.
“A majority of all corporate tax revenue is paid by fewer than 1000 super-profitable corporations. The Mamdani administration will champion an increase of the top corporate tax rate to 11.5 percent—the same rate as New Jersey—which will raise $5 billion per year,” his campaign website said.
Mamdani said he would push the City Council to raise property taxes by 9.5% if Albany refused to raise corporate taxes and the income tax on millionaires in an election year. The state must approve all major city taxes, with the exception of the property tax.
Fulop said he met with 25 of the city’s top corporate CEOs who want the Partnership to take a more aggressive approach in opposing higher taxes and government spending under Mamdani, a democratic socialist.
They are also alarmed about growing antisemitism in the city. Fulop and some of the city’s corporate honchos are Jewish.
‘The CEOs would say, `We’re in uncharted territory … a lot of things he says we don’t believe in period,” Fulop said.
“They’re definitely concerned about the business climate, about some of the rhetoric, growing antisemitism on the extreme left and … the quality of life throughout the city.”
He said there’s much bloat in the city government that should be addressed instead of raising taxes.
Exhibit A, Fulop said, is the city’s Department of Education.
Madmani’ pending plan for fiscal year 2027 beginning July 1 would boost the DOE budget overall by $3 billion, to a total $38 billion — event as the public school system’s enrollment has cratered following the COVID-19 pandemic.
But political opposition from the unions and council members have thwarted prior mayors from curbing spending at schools with dwindling enrollment, via a “hold harmless” provision.
“School funding in New York … is flawed.… You’ve seen enrollment drop from 1.1 million to a little bit more than 800,000 while the budget has increased,” Fulop said.
The city also spends massively on rental assistance programs, he noted.