Mamdani moment: socialist surge tests hochul on billionaires and corporate tax hikes

Some of New York City Mayor-elect Zoran Mamdani’s socialist policy goals may now be within reach, people told FOX Business, as political pressure mounts on Gov. Kathy Hochul and state lawmakers to help fulfill promises.

Mamdani’s sudden rise to power was fueled by grand promises to lower the cost of living through things like city-run grocery stores, universal childcare and free buses, but many have expressed doubts he will be able to persuade Albany state leaders to raise taxes to achieve his goals.

But conditions may be just right for Mr. Mamdani to realize his socialist utopia, said Ed Ra, a New York congressman who heads the House Ways and Means Committee, which oversees tax policy. The consequences would be devastating not only for people living in the city, but for New Yorkers across the state, Rahr said.

“It’s no secret that New York state has had a longstanding immigration crisis,” Rahr said. “The truth is that the top 1 percent already pays 41 percent of state taxes, and the top tax rate for the city and state combined is already 14.776 percent. So if we continue to lose these types of taxpayers, it’s going to have a huge impact, not just on the city’s own tax base, but on the state as a whole.”

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Rahr said the jeers Hochul received from the crowd at a “New York Not for Sale” rally in Queens just before the election were a good illustration of the pressure she faces from the left to approve Mamdani’s plan to impose a 2% income tax on people earning more than $1 million and raise the top state corporate tax rate to 11.5%.

Mamdani eventually had to come to his rescue, hold Hochul’s hand and escort him from the stage as the crowd repeatedly drowned him out with chants of “tax the rich.”

Rahr said Hochul faces similar pressures in Albany as he did in Queens.

“There’s support in the Legislature and I’m sure some Democrats will push the governor on this issue. I think you saw that pretty loudly at the rally about a week after Election Day,” he said.

“There are already people talking about primaries for governor, most notably the incumbent lieutenant governor. [Antonio Delgado]I think who’s already out there and supporting this kind of policy,” Ra explained.

“The rise of more progressive democratic socialist politics is certainly pushing legislators who don’t want to be defeated in the primary next time out. So we’re seeing legislators becoming more supportive of these kinds of policies, just as we would expect a governor to do if he has concerns about a primary challenger.”

He noted that Hochul may have already given herself a way out of that pledge by saying she would not support an income tax increase, even though she has previously expressed opposition to tax increases. “That doesn’t mean she probably wouldn’t support some kind of business tax increase or some other type of sales tax,” he said.

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New York City mayoral candidate Zoran Mamdani and Governor Kathy Hochul hold hands on stage during the “New York Is Not For Sale” rally at Forest Hills Stadium in Queens, New York City on October 26, 2025. (Reuters/Eduardo Muñoz/Reuters)

Rahr said several state business tax rates are set to expire soon, giving Mamdani’s camp an opportunity to further increase pressure. Any of these tax increases will only further accelerate the exodus of businesses from New York, he said.

“The state’s tax structure is very dependent on Wall Street and of course bonuses and things like that, so if we continue to lose high-income earners, it’s going to have an impact across the state,” he explained.

“We often talk about things like free buses and supermarkets, but at the end of the day, these words should be paid for by taxes,” he said.

“Somebody’s paying for it, right? So whether it’s income tax increases or other types of taxes that this administration is pushing through Albany, I think it’s going to impact the cost to the people in some way.”

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Republican Rep. Elise Stefanik of New York participates in a hearing of the House Education and Labor Committee on Tuesday, December 5, 2023, in Washington, DC. (Jiang Haiyun/Bloomberg via Getty Images/Getty Images)

That said, Rahr said he believes the conditions may be ripe for a new Republican governor, which is unthinkable in New York. After months of intense speculation, Rep. Elise Stefanik (RN.Y.) has officially launched her Republican candidacy for Governor of New York.

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While New York is widely seen as a deep blue stronghold, Rah said the backlash from the Mamdani case “may present a real opportunity to elect a Republican governor.”

“The public sees the city of Albany as having been overspent, overtaxed and mismanaged for far too long under complete Democratic control.” “People are ready to change that, and they want to change the direction of New York state. So I think it’s a very good situation for a Republican to take over the governor’s mansion next year.”