Brace yourself, New York—Governor Kathy Hochul might just be warming up to a corporate tax increase that could fund a progressive wish list in the Big Apple.
Reports have surfaced that Hochul is considering raising taxes on businesses to tackle a staggering state budget shortfall of over $4 billion next year while bankrolling the ambitious agenda of New York City’s Mayor-elect Zohran Mamdani, as New York Post reports.
This comes despite Hochul’s earlier promises to avoid tax hikes, a stance that’s now bending under pressure from the far-left wing of her party.
On November 13, 2025, Hochul met with Mamdani to hash out shared priorities like universal childcare, setting the stage for these tax discussions.
The proposed corporate tax jump, from 7.5% to 11.5% as pushed by Mamdani, aims to match New Jersey’s rate—the highest in the nation, per the Tax Foundation.
That kind of increase, layered with New York City’s existing business taxes, could make the effective rate even steeper, potentially pushing companies to pack up and leave.
Mamdani’s vision isn’t cheap, with a $10 billion plan that includes free buses, universal childcare, and a new Department of Community Safety.
Yet, both the state and city face daunting financial holes—New York State has another budget gap looming in 2027, plus federal funding cuts worth billions.
New York City, meanwhile, stares down a $5 billion shortfall for the next fiscal year, with more cuts expected from the Trump administration.
Opponents of the tax hike argue it’s a recipe for disaster, likely driving businesses out of the city at a time when financial stability is already shaky.
Adding fuel to the fire, Hochul’s past endorsement of the proudly socialist Mamdani has drawn sharp criticism from conservative voices ahead of her re-election bid in 2026.
“Kathy Hochul’s failed policies have already pushed businesses and residents out of New York for years,” said Bruce Blakeman, a potential Republican opponent for governor in 2026.
Blakeman didn’t hold back, adding, “With Zohran Mamdani now steering the direction of this one-party controlled state, it’s clear the Governor is prepared to raise taxes even higher—forcing New York businesses to pay far more than competitors in states like Florida, New Jersey, and Texas.”
Let’s unpack that: while Blakeman’s frustration is palpable, he’s pointing to a real concern—New York’s competitive edge could crumble if businesses face a heavier tax burden than in neighboring states.
Still, Hochul’s budget director, Blake Washington, recently downplayed the urgency, saying higher taxes are “the last thing on my mind” and insisting the state is in a financially “good spot.” That’s a tough sell when billions in deficits and cuts are on the horizon, and it feels like a dodge to avoid the hard questions about balancing progressive dreams with economic reality.
