New York City Mayor Zohran Mamdani is continuing his quest to close the city’s budget gap by pursuing statewide reforms, and this time he’s proposing to change the state’s estate tax.
In a “Tax Revenue Raiser Proposals” document obtained and reported on by several media outlets, the Democratic socialist mayor is seeking to drastically reduce the estate tax exemption threshold, which is the amount of a person’s estate that can be transferred to heirs tax-free upon their death. The plan would slash the threshold by about 90% from $7.1 million to $750,000.
The estate tax proposal, which also includes an increase of the top tax rate from 16% to 50%, is expected to bring in $4 billion in estimated annual revenue, Mamdani’s proposal states. But Gov. Kathy Hochul and Albany Democrats are staying quiet on the new tax proposal so far while several other Republican representatives in New York are questioning who it would help.
Here’s how this could affect New Yorkers.
How would estate tax changes affect New Yorkers?
Nassau County Executive and Hochul’s Republican challenger in the governor’s race Bruce Blakeman says the estate tax changes would be detrimental to many New Yorkers.
“Under Hochul and Mamdani’s death tax of 50%, children will lose half the value of their parents’ home and family businesses will have to be sold off just to pay this cruel tax,” Blakeman said in a statement on March 13.
Assemblyman Michael Tannousis, a Republican that represents parts of Staten Island and Brooklyn, told the New York Post that the latest alterations reveal Mamdani’s “tax the rich” plan would hurt the middle class instead. Rep. Elise Stefanik, a North Country Republican, seconded Tannousis’ statement, saying in a social media post that the Albany legislator “is spot on.”
A spokesperson for Senate Majority Leader Andrea Stewart-Cousins, D-Yonkers, said the Senate did not include the proposal in their one-house budget and Assemblymember Amy Paulin, a Westchester County Democrat, declined to comment.
Mamdani has been pushing to include an additional city income tax of 2% on anyone earning more than $1 million a year and an increase of the state’s top corporate tax rate to 11.5% in the city’s budget.
The state Senate’s one-house budget plan includes a personal income tax surcharge on all New Yorkers bringing in more than $5 million annually and a proposal to increase the top corporate tax rate from 7.25% to 9% for all New Yorkers with business income exceeding $5 million annually. Lawmakers in the state Assembly also included a robust “tax the rich” plan in their one-house budget, which includes personal income tax increases for New Yorkers making over $5 million per year.
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Hochul has repeatedly rejected tax hikes of any kind in the upcoming state budget, and a spokesperson for her office said the governor “looks forward to working with the Legislature to deliver a budget that makes New York safer and more affordable.”
What else has Mamdani proposed?
Mamdani also included several other tax revenue raising plans in the document, which was posted by Bloomberg and New York Focus. The plans included:
Emily Barnes covers state government for the USA TODAY Network-New York with a focus on how policy and laws impact New Yorkers’ taxes, communities and jobs. Follow her on Instagram or X @byemilybarnes. Get in touch at ebarnes@usatodayco.com.
This article originally appeared on Rochester Democrat and Chronicle: How Mamdani plan to cut estate tax threshold could affect New Yorkers
Reporting by Emily Barnes, New York State Team / Rochester Democrat and Chronicle
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