New York City Mayor Zohran Mamdani is under fire for backing a plan that would slash New Yorks estate tax exemption by nearly 90%, a move opponents say could drag middle-class families into a tax burden long aimed at the rich.
New York is one of the states that imposes its own estate tax in addition to the federal levy, and the proposed changes would dramatically expand its reachâpotentially sweeping in not just the wealthy, but families whose primary asset is a home they hoped to pass on to their children.
The plan would sharply reduce how much of an estate can be passed on tax-free, cutting the threshold from $7.35 million to just $750,000, among the lowest in the country, meaning far more estates would be subject to taxation.
In addition, Mamdani is proposing to more than triple the states top estate tax rate, raising it from 16% to 50%, a combination that could generate billions in new revenue for New York.
Edward Pinto, a senior fellow and co-director of the AEI Housing Center at the American Enterprise Institute, told Fox News Digital the proposal could push residents and their wealth out of New York.
“This proposal would destroy NYC’s wealth in a different manner,” Pinto said.
“This estate tax proposal will mistreat capital and result in the voluntary exodus of NYC residents and their wealth to places like Florida and Tennessee,” he added.
Others echoed similar concerns, pointing to the potential impact on families and long-term financial planning.
Joshua Rowley, a research fellow at the Mercatus Center at George Mason University, said estate taxes can force families to liquidate assets and increasingly reach beyond the wealthy.
“Estate taxes force citizens to liquidate assets to pay taxes on previously taxed assetsâputting homes, retirement accounts, and businesses in the crosshairs,” Rowley said. “It would also discourage responsible retirement planning and punish parents for the sole crime of wanting to leave their children better off.”
He added that proposals aimed at taxing the wealthy often expand over time.
“But the Mamdani proposal also pulls back the curtain on all tax-the-rich solutions. What starts off as an exclusive tax on the rich invariably gets expanded to lower income groups to satisfy the governments spending addiction,” Rowley said.
The estate tax proposal is just one piece of Mamdanis wider policy push.
His housing plan, a campaign promise aimed at addressing affordability, includes an immediate freeze on roughly 2 million rent-stabilized apartments.Â
In the nations largest city and a global financial center, the outcome of Mamdanis proposals could shape not only the future of housing market, but also broader debates over regulation, taxation and urban policy.
Mamdanis office did not respond to Fox News Digitals request for comment.
