Mayor Zohran Mamdani is pushing a two‑point hike in New York City’s personal income tax for earners over $1 million, taking the rate from 3.88 % to 5.88%. The proposal, backed by more than 60 % of city voters and supported in the state legislature, would add roughly $3 billion a year to the budget in the coming fiscal year. About 34,000 households would feel the change.

State officials are debating parallel measures, including a luxury‑second‑home levy and tweaks to a tax credit favored by high‑income filers. Governor Kathy Hochul, eyeing re‑election, warns that steep taxes could spur flight to low‑tax states such as Florida, even as research from the Fiscal Policy Institute shows past hikes in New York and elsewhere produced little migration among the wealthy.

Mamdani ties the surcharge to his universal child‑care agenda, arguing that additional revenue will fund free preschool expansion and eventually cover all children under five. Business leaders like Steven Fulop caution that any perceived cost‑benefit shift could erode New York’s competitive edge, yet the city’s millionaire base has risen to over 34 000 filers since 2014, suggesting limited immediate risk.