Mayor-elect Zohran Mamdani’s socialist election campaign has sparked the re-emergence of a classic narrative—the ever-looming threat of a mass exodus of New York’s wealthiest. As he promoted policy changes like raising “income taxes on the wealthiest New Yorkers by 2 per cent” and “the corporate tax rate from 7.5 per cent to 11.5 per cent”, critical warnings that “a tax increase at the top could drive away affluent New Yorkers” grew, attempting to undermine Mamdani’s ideas and inspire deeper concerns in the population.
This idea isn’t new. Even if we focus on New York, this same exact concern was expressed against former Mayor de Blasio’s tax policies in 2014 through to 2019, and after. And yet, there are still somehow enough millionaires and billionaires in the city to keep this narrative going.
The first important thing to establish is that even if some of the wealthiest individuals decide to leave purely to avoid the 2 per cent increase in income taxes, their ‘value-generating’ corporations won’t, because they benefit from huge consumer bases in cities like New York. But even if we entertain the idea of a mass exodus, there’s a second misconception in this narrative that if the rich go away they will leave a catastrophic vacuum in the market. Rather, this hypothetical ‘vacuum’ should be seen as space being freed up that would be filled by smaller businesses, finally able to thrive without being overpowered by huge companies. This space would stimulate competition, attract different investments — providing new jobs — and potentially create a healthier economy through a redistribution of income.
Of course, it’s not quite so simple. Wealth inequality is a highly complex issue, but the fact of the matter is that the global wealth gap is ridiculously wide, as the richest 1 percent have more wealth than the bottom 95 per cent of the world’s population. We need to recognise just how insignificant these increases for massive corporations are in proportion to how much revenue they make, and how little the minority of those earning millions in annual income will be impacted by taxing them 2 per cent more for the greater benefit of the public majority. These incomprehensibly-wealthy people do not need to be defended, or protected.
The rich want the general public to think that they and their monopolising corporations are indispensable so that they can continue getting away with less regulation and lower tax rates, which increases their private profits, and continually makes them richer. Fear-mongering about them leaving helps to produce this sense of dependency. It curates a widely-shared belief that our stability is fundamentally threatened without them. In reality, there’s much more flexibility around the issue of wealth inequality than just having to pander to increasingly-wealthy corporate conglomerates and their owners for the rest of eternity.
In an important conversation about progressive tax policies, this rhetoric distracts from the significant issues driving a majority support for them, like the affordability crisis, by focusing on an exaggerated idea of the rich abandoning New York.
“Zohran Mamdani at the Resist Fascism Rally in Bryant Park on Oct 27th 2024” by Bingjiefu He is licensed under CC BY-SA 4.0.
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The ‘Mass Exodus’ Trope: Fear-Mongering About Mamdani’s Policies
Mayor-elect Zohran Mamdani’s socialist election campaign has sparked the re-emergence of a classic narrative—the ever-looming threat of a mass exodus of New York’s wealthiest. As he promoted policy changes like raising “income taxes on the wealthiest New Yorkers by 2 per cent” and “the corporate tax rate from 7.5 per cent to 11.5 per cent”, critical warnings that “a tax increase at the top could drive away affluent New Yorkers” grew, attempting to undermine Mamdani’s ideas and inspire deeper concerns in the population.
This idea isn’t new. Even if we focus on New York, this same exact concern was expressed against former Mayor de Blasio’s tax policies in 2014 through to 2019, and after. And yet, there are still somehow enough millionaires and billionaires in the city to keep this narrative going.
The first important thing to establish is that even if some of the wealthiest individuals decide to leave purely to avoid the 2 per cent increase in income taxes, their ‘value-generating’ corporations won’t, because they benefit from huge consumer bases in cities like New York. But even if we entertain the idea of a mass exodus, there’s a second misconception in this narrative that if the rich go away they will leave a catastrophic vacuum in the market. Rather, this hypothetical ‘vacuum’ should be seen as space being freed up that would be filled by smaller businesses, finally able to thrive without being overpowered by huge companies. This space would stimulate competition, attract different investments — providing new jobs — and potentially create a healthier economy through a redistribution of income.
Of course, it’s not quite so simple. Wealth inequality is a highly complex issue, but the fact of the matter is that the global wealth gap is ridiculously wide, as the richest 1 percent have more wealth than the bottom 95 per cent of the world’s population. We need to recognise just how insignificant these increases for massive corporations are in proportion to how much revenue they make, and how little the minority of those earning millions in annual income will be impacted by taxing them 2 per cent more for the greater benefit of the public majority. These incomprehensibly-wealthy people do not need to be defended, or protected.
The rich want the general public to think that they and their monopolising corporations are indispensable so that they can continue getting away with less regulation and lower tax rates, which increases their private profits, and continually makes them richer. Fear-mongering about them leaving helps to produce this sense of dependency. It curates a widely-shared belief that our stability is fundamentally threatened without them. In reality, there’s much more flexibility around the issue of wealth inequality than just having to pander to increasingly-wealthy corporate conglomerates and their owners for the rest of eternity.
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In an important conversation about progressive tax policies, this rhetoric distracts from the significant issues driving a majority support for them, like the affordability crisis, by focusing on an exaggerated idea of the rich abandoning New York.
“Zohran Mamdani at the Resist Fascism Rally in Bryant Park on Oct 27th 2024” by Bingjiefu He is licensed under CC BY-SA 4.0.
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