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A new proposal to raise taxes on wealthy individuals and corporations in New York City is reigniting a familiar debate: how to generate more revenue without pushing money and taxpayers out the door.
The plan, backed by progressive policymakers including Zohran Mamdani, aims to increase taxes on high earners and large businesses as the city looks for ways to fund public services and close budget gaps. But critics, including "Shark Tank" investor Kevin O'Leary, argue the approach could backfire and ultimately affect everyday New Yorkers who are already looking for legit ways to help pay rent.
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The proposed tax plan
At its core, the proposal targets wealthy individuals and corporations. While details are still evolving, the plan focuses on increasing taxes on high-income earners, typically those making well into six or seven figures, along with certain business-related taxes aimed at large firms operating in or investing in the city.
The goal is to generate more revenue from those with the greatest ability to pay, helping fund public programs and services without raising taxes on lower- and middle-income households.
Supporters argue that cities like New York depend heavily on tax revenue to maintain infrastructure, transit systems, housing programs, and social services.
Who the tax is really aimed at
The proposal is not designed for the average New Yorker. Instead, it focuses on high-net-worth individuals, including investors who own property in the city but may not live there full-time, as well as corporations with significant profits tied to New York-based operations.
These groups often contribute a disproportionate share of tax revenue. In New York, top earners already account for a large percentage of total income taxes collected by the state and city.
That concentration is part of what makes the proposal attractive to policymakers, but also what makes it controversial.
Why Kevin O'Leary is pushing back
Kevin O'Leary has been outspoken in his criticism of the plan, arguing it misunderstands how cities generate economic activity.
He pointed to the role of wealthy, often out-of-town investors who purchase high-value real estate and inject money into the local economy without heavily relying on public services.
"Well, let's just look at the policy itself and stay out of the emotional aspect of it ... These people do not live in the city … they don't burden the system," O'Leary said, emphasizing that they still pay taxes, employ workers, and support maintenance and service jobs tied to their investments.
"Let me count how many ways this policy is stupid … you want more of these people that don't live here, pay taxes, pay maintenance, create jobs, and don't use the city's services, that's sheer blind stupidity," he added.
His argument centers on the idea that discouraging this group could reduce the very economic activity the city depends on.
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Capital moving elsewhere
One of the biggest concerns raised by critics is mobility, as high earners and large investors have more flexibility than most taxpayers. In recent years, many have already relocated to lower-tax states like Florida and Texas, taking income, spending, and investment with them.
O'Leary and others warn that increasing taxes further could accelerate that trend. When capital moves, the impact can extend beyond the individuals leaving. It can reduce demand for real estate, slow development projects, and limit job creation tied to those investments.
Supporters of the plan
Backers of the proposal see it differently, arguing that cities need stable revenue streams to function, especially as costs rise for housing, public safety, and infrastructure.
From that perspective, asking wealthier individuals and corporations to contribute more is a way to maintain essential services without placing additional strain on lower-income residents.
Supporters also note that New York remains a global financial hub, offering opportunities and access that are difficult to replicate elsewhere. That, they argue, makes it less likely that all high earners would leave simply because of tax changes.
Impact for everyday New Yorkers
Even though the tax targets high earners, the effects could still reach the broader population.
If higher taxes discourage investment or lead to fewer development projects, it could slow job growth in industries tied to construction, real estate, and services. That can have a knock-on effect on wages and employment opportunities.
"They spend 5 million plus dollars ... Not using any of the city's services, which is what the city needs, less people putting pressure on it. They pay taxes, and they pay maintenance jobs to maintain the buildings," O'Leary said.
There's also the question of housing costs. If fewer investors enter the market or existing owners scale back, it could change supply dynamics, which may influence prices and rents over time.
At the same time, if the tax generates additional revenue as intended, it could help fund programs that benefit residents directly, such as transit improvements or housing initiatives.
The broader balancing act
On one hand, governments need revenue to operate and invest in public services. On the other hand, they must remain competitive enough to attract and retain businesses and high-income taxpayers.
Finding that balance is not easy, especially in a city like New York, where both the cost of living and the cost of doing business are already high.
Bottom line
The proposed tax plan backed by Zohran Mamdani is aimed at raising revenue from wealthy individuals and corporations, not average residents. But as Kevin O'Leary and other critics argue, the effects could extend beyond that group if investment slows or capital moves elsewhere.
If housing costs rise or job opportunities weaken, more New Yorkers may start looking to supplement income as the city waits to see whether the policy strengthens its finances or creates new economic challenges.
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