Robert Hornak
Robert Hornak is a veteran political consultant who has previously served as the Deputy Directvor of the Republican Assembly Leader’s NYC office and as Executive Director of the Queens Republican Party. He can be reached at rahornak@gmail. com and @roberthornak on X.
Margaret Thatcher famously said, “The problem with socialism is that you eventually run out of other people’s money.” This is one of the many problems every socialist government has faced, and usually sooner rather than later.
The problem, ultimately, is that nothing is free. Someone has to pay for it. And there comes a point where the productive people are forced to carry too much of the burden and have too many people riding on their coattails. They eventually get frustrated and close up or move shop.
This is human nature and has been proven throughout history. And it’s not that they are greedy. Most people are very generous. But there are limits to people’s generosity and there comes a point where they feel like suckers, doing all the work and taking all the risks.
This is the problem Mamdani is going to face, and quickly. He has made big promises about making NYC a more affordable place to live. But the questions that need to be addressed are basic. First, how will you pay for your promises? Second, what will be the reaction if implemented? And third, how much of an impact will they have on making the city more af- fordable.
He plans to pay for everything through new taxes. He wants to tax the rich and tax corporations operating inside the city. But for both he needs Albany’s approval. Gov. Hochul has already thrown cold water on increased taxes on the rich. She’s running for reelection this year and she knows that when people say “tax the rich” what they really mean is tax the productive. And the productive vote.
Usually at the ballot box but also sometimes with their feet. And that vote by feet can be truly devastating. Look at California, which lost over 268,000 residents in 2023 alone, and now is facing projected budget shortfalls of $18 billion for the coming fiscal year and $35 billion for the year after. New York and Illinois are right behind in 2023 population loss, 200,000 and 93,000 respectively.
These are the highest taxed states in the country. If high taxes created a lower cost of living, these three states and their big cities would already be affordable. Bu the extreme opposite is the reality.
That leaves the corporate tax, which in NYC is 6.5% for corporations with receipts up to $1 million and 8.85% over that. Mamdani wants to raise the city tax to 11.5% to match the rate across the river in New Jersey, where the rates are 9% for corps with revenue over $100,000 and then increases to 11.5% for corps over $10 million.
What Mamdani ignores is that there is a NYS tax also, 6.5% for businesses up to $5 million and 7.25 above that. And, we know that businesses don’t actually pay those taxes, the consumers do. They pass through in the price of goods and services. Democrats were very adamant about making that point in the debate over tariffs. So, either prices will increase, making the cost of living go up, or many businesses will move out of NYC to save costs, taking their corporate taxes and payroll taxes with them.
What Mamdani is offering in exchange, free buses, free child- care, a city owned version of COSTCO, and a rent freeze for a relatively small portion of the people living in the city (approx. one million stabilized units of 2.5 million rental units of a total 3.75 million homes), won’t ease the pain of living in one of the highest cost of living locations in America.
There is no big-ticket, sweeping plan to reduce the cost of living. And if you listen to the people who pay the most taxes, you’ll likely hear that the biggest driver of high costs is government itself. So, the real question then is, what is the real goal of Mamdani’s plans? To make life more affordable, or to just grow the size of government while socializing the services you are forced to rely on, as long as there is other people’s money to keep spending.
