Perhaps he will hunt them down at the tables of Masa, where sushi can go for almost $1,000 a head. Or maybe he’ll track them to the bar at the Plaza hotel, or else evict them from their penthouses overlooking Central Park. It is not yet clear how the radical Democrat nominee for mayor of New York, Zohran Mamdani, intends to act on his apparent desire to cleanse the city of billionaires if he wins power. But one point is surely clear. If he succeeds, he will find it impossible to pay for almost any of his expensive promises. And what might be termed the Mamdani Fallacy will be painfully exposed.
Mamdani certainly does not mince his words. During a TV interview, he argued that nobody should have 10 zeroes or more on their bank statement: “I don’t think that we should have billionaires because, frankly, it is so much money in a moment of such inequality, and ultimately, what we need more of is equality across our city and across our state and across our country.”
Of course this is a perfectly legitimate point of view for someone who describes himself as a socialist. Most of the major Left-wing thinkers of the last couple of hundred years have staked out very similar positions.
And yet there is a catch. While he wants the billionaire class to be abolished, he also effectively wants them to pay for all his expensive campaign pledges. He wants free childcare right across the city, government-run grocery stores to lower the cost of food, and rent controls and subsidies to reduce the price of somewhere to live.
How is it all going to be paid for? With higher taxes on the rich apparently, including an extra 2 per cent city income tax, on top of federal and state taxes, for anyone earning more than $1 million a year, and a higher rate of corporate tax as well. While this would also punish many of the merely wealthy, the reality of the income distribution is that he would be relying on large sums being raised from New York billionaires, too.
So Mamdani wants to have his billionaire cake and eat it. The plutocrats should be wiped out, but at the same time they should cheerfully pay extra taxes to fund extravagant social programmes. It is a view that is increasingly common across the Western world. In Britain, the governing Labour Party both wants to get rid of non-doms (as wealthy foreigners with a special tax exempt deal are known), while also raising billions in extra taxes from the rich. In France the radical Left wants greater equality, but it also wants wealth taxes to pay for some of the world’s most generous social benefits. The message is always the same. The rich are to be destroyed, but also pay for everything.
We all know what will happen. Mamdani will get half of what he is arguing for. The rich will indeed be driven out of New York. After all, it is hard to see that many billionaires, or even mere millionaires, will want to stick around in a city that plans to tax them to extinction. They can easily move to low tax Miami or Dallas, or if that is too far then Boston is only a short flight away. They will all leave very quickly.
But the other half of what Mamdani wants – all that extra tax revenue he is relying on to pay for his spending – will flee New York along with the private jets.
His agenda will have been exposed as crude populism. And it is the New Yorkers with only a couple of zeros on their bank statements who will suffer the most as the experiment collapses in failure.
