Mamdani prepares to “Soak the Middle Class”

These days there aren’t too many people clamoring to move to New York City. Maybe it’s the rats. Or the high taxes. Or the homeless. Or the socialism.

You can see the effect in the city’s population numbers: in 2018, roughly 8.4 million people lived in the five boroughs. Today, the population is barely above that level— basically a less than 1% population increase in 7+ years.

But while New York’s population has remained flat, the city government’s spending has BALLOONED— from $85 billion in 2018 to a massive $127 billion (based on Zohran Mamdani’s proposed budget.)

Think about it: that’s a nearly 50% increase in government spending, even though the population is almost exactly the same.

In other words, per-capita spending is up roughly 50% in seven years.

This raises some obvious questions: given the surge in per-capita spending, are New Yorkers 50% better off? Are the streets 50% cleaner? Are the schools 50% better? Is the subway 50% safer?

Of course not. Quite the opposite.

Since 2019, major felonies in New York City are up 30%. Felony assaults are up 42%. Robberies are up 24%. Car theft has nearly tripled. Shoplifting has doubled.

Rat complaints are up 19%. The homeless shelter population has exploded 50%.

Ambulance response times to life-threatening emergencies have nearly doubled, from six minutes to over eleven. The share of New Yorkers who feel safe on the subway has been cut in half.

Roughly half of New York City public school students still can’t read or do math at grade level.

In short, New York’s leaders managed to spend almost 50% more money, yet deliver worse and worse results… so city residents have received a negative return on their tax dollars.

Now, if you were running a business and discovered that costs had risen 50% with zero improvement in output, the first thing you’d do is audit your spending… and then probably fire at least half of y our management team. The failure is so blindingly obvious it’s not even debatable.

But that’s not how government works.

To be fair, Mayor Mamdani did recently acknowledge that New York City faces a “fiscal crisis at the scale of the Great Recession.” He even ordered every city agency to appoint a “Chief Savings Officer” to root out waste and inefficiency.

(That sounds a lot like DOGE to me. But whereas the entire establishment joined forces to chase Elon Musk out of town for trying to save taxpayer money at the federal level, the socialist Mamdani is being celebrated for his economic genius.)

Sadly, Mamdani’s commitment to fiscal discipline lasted very long. Because rather than actually cut spending, the new mayor has reached for the oldest trick in the book: tax the rich.

Mamdani recently testified before New York State lawmakers that “the wealthiest individuals and most profitable corporations should contribute a little bit more so that everyone can live lives of dignity.”

Bear in mind that New York City spending is up 50% since 2018, yet the rats are 19% worse. Sounds like a “life of dignity” to me!!

Obviously Mamdani is completely delusional.

The top 1% of taxpayers in New Yorker already fund the vast majority of the city’s tax revenue.  So the idea that this group “isn’t paying enough” ignores the single most predictable consequence in all of tax policy: wealthy people move.

New York State has hemorrhaged $111 billion in adjusted gross income to interstate migration over the past decade.

That’s not just people leaving—it’s the majority of their tax base walking out the door, mostly to places like Florida and Texas that charge no state income tax.

This is what makes Mamdani’s approach so spectacularly wrong on multiple levels.

First, he’s ignoring the most obvious problem—spending. If the city’s budget had simply kept pace with population growth and inflation since 2018, New York wouldn’t have a fiscal gap at all. But no one in City Hall is even entertaining that conversation.

Second, he’s actively making the problem worse by threatening the city’s biggest taxpayers. His proposed 2% income tax hike on millionaires sounds great at a rally. But a significant chunk of those millionaires will simply change their address to Miami and take their tax revenue with them.

Third—and this is the part they never say out loud until it’s too late—when the wealthy leave and the budget gap remains, there’s only one lever left: raise taxes on the middle class.

And that’s exactly what’s already happening.

Mamdani has threatened a 9.5% property tax increase as a “last resort” if Albany doesn’t approve his wealth tax. That increase would hit over 3 million residential property owners—including the guy who can barely afford his 400-square-foot rat-infested studio apartment in Queens.

Meanwhile, New York’s combined state and local corporate tax rate already sits at 17.44%—nearly as high as the entire 21% federal corporate tax rate. Businesses in New York effectively face a combined rate approaching 40%. And Mamdani wants to raise it further.

Even if he gets everything he’s asking for, he’ll only accelerate the city’s decline.

More wealthy residents will flee. More businesses will relocate. The budget gap will grow. And the property tax hike will come anyway—paid for by the middle class.

This is the playbook. Politicians talk a big game about soaking the wealthy, but they always end up soaking the middle class. The wealthy have options. The middle class have fewer. Their money is the easiest to grab.

And New York City is a perfect microcosm of what’s coming at the federal level.

The Congressional Budget Office just projected $24.4 trillion in cumulative deficits over the next decade. Federal spending has surged from $4.4 trillion in 2019 to over $7 trillion today—a 59% increase.

I imagine very few people believe that America is 59% better off than it was in 2019.

But once again, rather than demolish rampant fraud and make much-needed reforms, i.e. Congress actually does its job, instead it’s the same voices from the Left howling that Americans aren’t being taxed enough.

New York is ground zero in this experiment gone wrong. And the city’s voters are about to get exactly what they asked for— middle class pain brought on by the false promise of a socialist utopia.

Source

Simon Black is an international investor, entrepreneur and permanent traveler. His daily letter is both educational and entertaining, and we suggest that those who want unbiased, actionable information about global opportunities sign up for Sovereign Man’s free, actionable newsletter at http://www.SovereignMan.com.

From Simon Black of SovereignMan.com

Source: https://www.schiffsovereign.com/trends/mamdani-prepares-to-soak-the-middle-class-154408/