Breaking down “Zohranomics,” NYC mayor Zohran Mamdani’s policy doctrine

Zohran Mamdani won the New York City mayoral race by promising to make the city cheaper to live in and harder to exploit.

His economic blueprint, now known as Zohranomics, is built around three things: raise taxes on rich people, hit corporations harder, and borrow big to fund huge programs like universal child care, affordable housing, and maybe even free city buses.

Every dollar he needs is supposed to come from those making the most, or from the city taking on more debt than ever. That’s the setup.

According to the budget estimates cited by the Wall Street Journal, Zohran takes office while the city is already facing a multi-billion-dollar deficit.

That shortfall is expected to grow, thanks to federal cuts approved this summer in a Republican-led tax bill that moves more costs (like food stamps and Medicaid) to cities. President Donald Trump, who returned to office after the 2024 election, had also threatened to withhold billions in federal funds if Zohran won.

Meanwhile, none of Zohran’s major tax ideas can happen unless Governor Kathy Hochul and state lawmakers in Albany approve them, and Kathy’s got her own election in 2026 to think about.

Zohran pushes new taxes and massive borrowing plan

Zohran’s plan to tax millionaires and corporations doesn’t just face political roadblocks, it’s also technically complicated. The city’s corporate tax haul has more than doubled since 2019, rising from $3.4 billion to $7.5 billion in 2024.

If every corporation had paid at an 11.5% rate that year, the total would have hit $11.9 billion, a $4.4 billion increase. But Zohran’s platform doesn’t explain how those state-level collections would even make their way back to New York City.

For companies already paying the city’s 8.85% corporate income tax, the combined rate inches close to the federal 21% rate. “Some firms are also on the hook for the MTA surcharge,” said Jared Walczak from the Tax Foundation.

Zohran has said the extra money could help pay for universal child care and make the tax code fairer, though he has recently said he’s “open to other revenue sources” if Albany pushes back.

On the personal income tax side, the state already charges its top 1% a 13.5% rate. Zohran wants to hike taxes on those earning just over $1 million, which E.J. McMahon from the Manhattan Institute said would make New York’s combined city-state rate the highest in the country.

The Independent Budget Office said the hike might have raised $3.74 billion in 2021 and $2.77 billion in 2022, but only if it hits joint filers, which could drag the income threshold lower. Zohran’s team hasn’t said exactly who the hike would apply to.

To fund his housing plan, Zohran is also looking to borrow $70 billion. But the city’s legal debt limit is way below that. The last time Albany allowed New York to go over it was during 9/11 and the 2008 financial crisis.

Howard Cure, who heads municipal bond research at Evercore, said the rent paid by tenants might cover some of the repayment, but not all. If the rest comes out of the city’s main budget, that could complicate everything.

“It’s not clear how Wall Street would even react,” Cure said. So far, bond prices haven’t changed, but analysts think that’s only because no one believes the city will get permission to borrow that much.

Rent freeze could cost billions, free buses raise fare repayment risks

One place where Zohran can act without Albany is rent control. If Eric Adams doesn’t fill his expiring Rent Guidelines Board seats before leaving, Zohran could install eight members and control the five votes needed to freeze rents.

The problem is financial. Mark Willis, a senior policy fellow at NYU’s Furman Center, said the city could be on the hook for $3 billion annually to help subsidized landlords cover maintenance and debt. Buildings built after 1973 were budgeted with rent increases in mind. A freeze could ruin that model.

Owners of older rent-stabilized buildings would also get hit. “They could lose $2 billion over four years,” Willis said. “In the first year alone, their annual shortfall could grow 42%, to $400 million.” That would leave some of the most stretched owners unable to keep up.

Zohran also floated the idea of free city buses, but fares aren’t even under his control. The MTA Board sets them, and the mayor only appoints four members. Fare revenue also plays a big role in paying back the city’s transit bonds.

“If you’re removing that income, bondholders have to agree to it,” said Nicole Gelinas at the Manhattan Institute.

A 2023 review by the Independent Budget Office said eliminating bus fares would have cost the city $708 million in 2022. MTA CEO Janno Lieber warned that in a few years, it could climb to $1 billion annually.

The MTA already faces a $3 billion recurring hole in its budget once COVID-era federal aid dries up, and “ridership isn’t projected to be back to pre-Covid levels in the foreseeable future,” according to the agency’s website.

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