New York Is Moving Toward “Taxing the Rich” More Heavily

Every morning from 6:30 a.m., I hold an international affairs seminar for our members. Today, I’d like to share a small part of the seminar I gave on August 21.

Today, I’d like to take a look at what is happening in New York.

Zohran Mamdani, who became mayor of New York City in January 2026, describes himself as a democratic socialist. During his election campaign, he focused heavily on the rising cost of living and gained support by arguing that wealthy individuals and large corporations should shoulder a greater share of the tax burden.

One of the policies Mayor Mamdani is currently calling for is an additional 2% income tax on New Yorkers earning more than $1 million a year. The basic idea is: “If you earn $1 million a year, you can afford to pay another $20,000.”

He has also proposed raising New York State’s top corporate tax rate from 7.25% to 11.5%.

However, neither of these measures can be implemented by the New York City mayor alone. They require cooperation from the state government and state legislature. Governor Kathy Hochul has taken a cautious stance toward major tax increases, so these proposals have not yet become law.

The “Pied-à-Terre Tax” Has Already Taken Effect

Meanwhile, another measure has already begun moving forward: an additional tax on non-primary residences, commonly referred to as the “pied-à-terre tax.”

This tax is aimed at people who own expensive residential property in New York but do not use it as their primary home—in other words, luxury second homes.

The measure was enacted in May 2026, and taxation for the 2026–27 fiscal year began on July 1.

Properties that may be subject to the tax include one- to three-family homes assessed by the New York City Department of Finance at more than $5 million, as well as condominiums and co-ops valued at $1 million or more.

However, properties used as a primary residence by the owner, the owner’s family, tenants, or other qualifying residents are generally exempt.

So far, the idea sounds fairly straightforward: “Let’s collect a little more tax from wealthy people who own luxury second homes in New York.”

But once the system actually began operating, things became much more complicated.

Nearly 960,000 Property Records Were Published, Causing Confusion

On July 24, the New York City Department of Finance published what it called a “Supplemental Market Value List” related to the new tax.

The list included approximately 960,000 properties, allowing people to search information such as owners’ names, property addresses, and assessed values—information that had already been publicly available as part of property-tax records.

There is one important point to understand here:

Not all of those approximately 960,000 properties were subject to the pied-à-terre tax.

The list covered a broad range of residential properties as required under the law. In reality, the city sent notices saying that a property could potentially be subject to the tax to approximately 17,000 property owners.

However, simply looking at the list could give people the impression that their name and home address had been publicly identified as being connected to a new “tax on the wealthy.”

Furthermore, some people who actually lived in the properties as their primary residences also received notices.

This quickly led to complaints such as:

“Why am I being treated as if I own a second home?”

and

“Why do I have to prove that I should be exempt?”

Residents Must Prove: “I Actually Live Here”

People who received notices from the city but said, “This is not a second home—I actually live here,” were required to apply for an exemption themselves.

They may need to provide documents such as tax returns or a driver’s license to prove that the property is their primary residence.

So the controversy is not simply about being charged additional tax.

People were suddenly told, “You may be subject to this tax,” and then had to gather documents themselves to prove that they were not.

This has generated considerable backlash.

In August, homeowners filed a lawsuit against New York City over the way the system was being administered.

A court temporarily ordered the city to halt enforcement of the tax, but because the city appealed, that order has itself been put on hold.

In other words, the legal battle is still ongoing.

Mayor Mamdani Stands Outside a Billionaire’s Home and Says, “We’re Taxing the Rich”

One episode that has come to symbolize this controversy involves Ken Griffin, founder of Citadel, one of America’s leading hedge funds and financial firms.

 Citadel is actually one of the most prominent hedge fund and financial companies in the United States.

During the election campaign in April 2026, Mayor Mamdani filmed a video outside Griffin’s ultra-luxury New York penthouse and declared:

“Happy Tax Day, New York. We’re taxing the rich.”

Griffin’s residence is well known for having been purchased for approximately $238 million.

Griffin strongly objected.

He criticized the decision to come directly to his home, single him out personally, and publicly declare that he would be taxed, calling the approach “creepy.”

Personally, regardless of one’s view of the tax policy itself, I think using an individual’s private residence as part of a political campaign raises legitimate safety concerns.

In New York, John Lennon was shot and killed outside his home at the Dakota in 1980.

So it is understandable that some people are concerned about portraying the homes of wealthy individuals almost as political targets.

Citadel Expands Investment in Miami Instead of New York

Policies like these can also have broader economic consequences.

Citadel has already moved its headquarters from Chicago to Miami, and in May 2026, Griffin announced plans to further expand the company’s investment in Miami.

At the same time, Citadel had been considering a major redevelopment project in New York, but Griffin has indicated that the company may reconsider those plans in light of the Mamdani administration’s policies.

So the issue does not end with the simple argument that:

“If we tax wealthy people more, we can redistribute that money to ordinary citizens.”

If wealthy individuals and corporations respond by saying, “In that case, we’ll move to another state,” there can also be consequences for employment, corporate tax revenue, and income-tax revenue in New York.

Of course, there is also the opposing argument:

“Wealthy people are not going to abandon New York simply because they have to pay somewhat higher taxes.”

or

“They should contribute more in order to maintain the services of a major global city.”

This has become a major political debate in New York.

“Tax the Rich” Is Easy to Understand—but Much Harder to Implement

One reason Mayor Mamdani became popular was that his message was extremely easy to understand.

Prices are high.

Rent is high.

Ordinary people are struggling.

So why not collect more taxes from people who have plenty of money and use that revenue to improve the lives of ordinary citizens?

During an election campaign, that sounds very straightforward.

But once you actually try to create and administer such a system, difficult questions immediately arise:

• Who exactly counts as “wealthy”?
• Which properties are genuinely second homes?
• Who has to prove whether a property is a primary residence?
• And will wealthy individuals, businesses, and investment capital begin leaving New York?

The confusion surrounding the list of approximately 960,000 properties illustrates this problem very clearly.

There is an enormous difference between the principle of “taxing the rich” and the practical reality of government officials determining, one individual at a time, who should be taxed and then collecting that money.

President Trump Calls Mayor Mamdani a “Communist”

President Trump has repeatedly criticized Mayor Mamdani in very strong terms, calling him a “communist.”

Of course, Mamdani himself describes his political position as democratic socialism and does not call himself a communist.

From President Trump’s perspective, however, policies that increase taxes on wealthy individuals and corporations in order to redistribute wealth represent a direction he believes America should not take.

I think what is happening in New York is worth watching carefully.

When we look back at history, major social changes rarely occur in only one country. Similar political movements and social transformations often emerge in several countries around the same period.

The wealthy versus ordinary citizens.

Large corporations versus workers.

Established politics versus new political movements.

It will be important to watch how these tensions develop in the United States—and whether similar trends begin spreading to other countries, including Japan.

Rather than thinking, “This is only about New York City politics, so it has nothing to do with us,” I think it is worth paying close attention to what happens next.