New York City Mayor Zohran Mamdani is urging Albany to consider a sweeping overhaul of New York’s estate tax, proposing to sharply lower the exemption threshold and dramatically increase the top rate on large inheritances. His plan would cut the exemption from more than $7 million to $750,000 while boosting the highest tax rate from 16 percent to 50 percent, Bloomberg reported.
The idea was included in a policy memo his administration recently shared with state lawmakers as they negotiate the state budget, according to NY Focus.
The estate tax proposal is one of several revenue measures Mamdani’s office has floated as the city prepares for a significant budget gap. New York City is projecting a $5.4 billion deficit for the fiscal year that begins July 1, and the mayor is asking state officials to help identify new sources of funding to help close the shortfall.
Among the other proposals is a narrower package of business tax increases aimed specifically at companies operating in the city. The administration estimates those changes could generate about $1.75 billion annually. Under the plan, the city’s corporate tax rate would rise to 10.8 percent for financial firms and to 10.62 percent for other corporations, while the tax on large unincorporated businesses would increase modestly for firms earning more than $5 million.
Mamdani is also proposing to scale back the Pass-Through Entity Tax credit, which currently allows certain business owners to use company tax payments to fully offset what they owe in personal income taxes. Limiting that credit to 75 percent of its value would produce roughly $700 million a year, according to city estimates. The mayor continues to advocate for raising the local income tax rate on residents earning more than $1 million annually, a measure projected to bring in about $3 billion each year.
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