Mamdani Pushes Tax Hikes, Racial Equity While NYC Jobs Flee
As NYC lost 20,000 jobs while businesses flee to lower-tax states, Mayor Mamdani responds with proposed tax hikes and a racial equity plan under DOJ review.
New York City lost 20,000 jobs in 2025. Behind each number is a family facing uncertainty, a mortgage at risk, a future upended. While JPMorgan Chase CEO Jamie Dimon warns of a "large exodus" from high-tax states, Mayor Zohran Mamdani responded by proposing corporate tax hikes from 7.25 percent to 11.5 percent and releasing a racial equity plan now under Department of Justice review for potential illegality.
Revised state labor department data shows New York City was the only region in New York State to see net job losses last year. The city shed 19,500 to 20,000 positions while state and city comptrollers had projected a 40,000 increase.
Business departures are accelerating in real-time. Apollo Global Management, a $900 billion asset manager, is planning a second U.S. headquarters in Texas, Florida, or Nashville. JPMorgan Chase reduced its New York City headcount by 20 percent over the past decade, while Texas operations grew by 6,000 employees since 2015.
"In the last week, there have been several major companies in the Partnership that have said they're going down the same road as Apollo, exploring options in Florida and Texas," said Steven Fulop, CEO of the Partnership for New York City. "Some of these firms are major New York City brands that have been headquartered here for 100 years. The fact is, they're leaving."
Dimon explicitly linked business flight to taxation in his April 6 shareholder letter. "Higher taxes mean lower returns on capital and less competitiveness by their nature," he wrote. "Individuals vote with their feet, you can already see a fairly large exodus of people and jobs out of some states with high taxes and high expenses."
Mamdani proposes raising the state corporate income tax rate from 7.25 percent to 11.5 percent, increasing city corporate taxes for financial firms from 9 percent to 10.8 percent, and imposing a 2 percent flat tax on residents earning over $1 million annually. He threatened a 9.5 percent property tax hike as a "last resort" if Albany does not approve his tax increases on the wealthy.
Governor Kathy Hochul has already rejected Mamdani's proposed tax on high-income earners, creating a standoff as the city faces a $5.4 billion budget gap after state contributions.
The administration has left key economic positions vacant for three months. The Economic Development Corporation CEO position has been empty since January, and Mamdani eliminated the deputy mayor for economic development role entirely in favor of a deputy mayor for "Economic Justice."
"The business community wants to see that the mayor and this administration is serious about economic growth," said Jessica Walker, CEO of the Manhattan Chamber of Commerce. "And the quickest way to show that is to fill this role."
Instead of addressing the business exodus, Mamdani released a Preliminary Citywide Racial Equity Plan on April 7 involving 45 agencies and more than 200 city workers. Department of Justice Assistant Attorney General Harmeet Dhillon immediately called the plan "fishy/illegal" and announced a Civil Rights Division review.
"This is another example of divisive, race-based policymaking that the Supreme Court has routinely held to be unlawful," Dhillon stated.
The same day, Mamdani released a True Cost of Living report showing 62 percent of New Yorkers, 5.04 million people, do not meet their basic living costs. The report found 73 percent of children live in families that cannot cover expenses, with the Bronx reaching 87 percent.
The City Council proposed an alternative path that does not raise taxes. Their plan would close the $5.4 billion budget gap using $6 billion in revenue reestimates and spending cuts. Mamdani has not adopted this approach.
"I think we are facing some troubling numbers," Mamdani acknowledged in an interview with The New York Times. "I am incredibly heartened by what we've also seen at the same time. We're seeing the highest demand for Manhattan office space in over a decade."
Real estate firm JLL reported strong first-quarter leasing activity, with American Express committing to 2 World Trade Center. However, business leaders argue office demand represents established companies, not those considering departure.
Dimon framed the stakes in historical terms. "I am reminded that in the 1970s, nearly half of the 125 Fortune 500 companies based in New York City left," he wrote. "No city, or company or country, has a divine right to success."
Fulop delivered a final warning about the administration's direction. "You need to be able to communicate broadly how fragile the economy is and that some of these legislators who are pushing tax increases for the sake of tax increases are really not thinking about the long-term best interests of the city and region."