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Jarrett Warns NYC Tax Plan Risks Business Exodus
Clear Facts
- Fox News legal analyst Gregg Jarrett cautioned that Mayor Zohran Mamdani’s proposed tax policies could push companies out of New York City.
- State laws require approval from Governor Kathy Hochul and the legislature for city-specific tax increases, and Hochul has rejected higher taxes on the wealthy in 2024.
- New York City’s borrowing is capped by the state, and the city must maintain a balanced budget under the state constitution.
Gregg Jarrett warned that Zohran Mamdani’s tax proposals face significant legal hurdles and risk harming New York City’s economy by prompting businesses to leave.
Mayor Mamdani’s plans require approval from Governor Hochul and legislative backing, which he currently lacks.
Jarrett noted that businesses are already leaving New York due to high taxes, referencing 5,000 lost companies last year.
“He can try to raise the rate even higher, impose it on out-of-state corporations if he can establish a nexus, but they may just stop doing business in New York because at some point it becomes punitive. It becomes uneconomic for corporations,” Jarrett said.
He argued that Mayor Mamdani overstates New York City’s authority to independently increase taxes and mischaracterizes the tax rates and structure.
“There has to be what the law calls an economic nexus. So he’s overstating his ability, and he’s also got his facts wrong. I mean, the 7.5% rate he quotes, that’s the state corporate tax. But as mayor, he has no control over that. The legislature does it, the governor. But he also forgets you have to add in the city tax of 8.85%,” Jarrett stated. “So, you know, do a little math, you’ve got 16%. That’s the highest in the nation, already higher than New Jersey’s 11%, which he quotes. So, you know, he’s got his facts wrong.”
New York State law mandates the city balance its budget each year and limits borrowing, ensuring taxation and debt decisions remain mainly under state authority.
Mamdani has promoted higher taxes on wealthy individuals and businesses, including proposals to increase property taxes in certain areas of the city.
He claims these changes aim to create a fairer tax system and support his policy goals.
“It is not driven by race. It’s more of an assessment of what neighborhoods are being undertaxed versus overtaxed,” Mamdani said.
“The focus here is to actually ensure a fair property tax system.”
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