Zohran Mamdani hasn't even taken office yet, and he's already making his move. The New York City mayor-elect just unveiled his first major proposal: a two-percentage-point tax increase on income above $1 million. The idea is straightforward. Tax the highest earners more, use the money to fund things the city desperately needs but has chronically underfunded—think free bus service and affordable housing—and watch billions roll in every year.

Of course, that assumes millionaires stick around to pay the bill. If they decide the tax hike isn't worth it and head for Florida or Texas, those billions evaporate pretty quickly.

The Great Millionaire Flight Debate

This is where things get interesting. Critics of the plan worry that New York's tax base is dangerously dependent on its wealthiest residents. A relatively small group of high earners contributes a huge chunk of the city's income tax revenue. Push them too hard, the argument goes, and they'll leave. Lose even a small percentage of that group, and you've got serious budget problems.

But here's the counterargument: wealthy people don't actually leave cities because of taxes. At least, not in meaningful numbers.

"Tax policies just really don't drive relocation decisions," Kamolika Das, local policy director at the Institute on Taxation and Economic Policy, told USA Today. "They've been claiming this for a long time, and there's just very scant evidence to support it."

Her point is that the whole "millionaires will flee" narrative has been repeated for decades, but the data doesn't really back it up. Wealthy people value what New York offers—the business networks, cultural institutions, professional opportunities—and they don't typically abandon all of that over a moderately higher tax bill.

The Reality Check

Supporters of Mamdani's plan believe that New York's advantages are sticky. The city's elite aren't going to walk away from everything they've built here just because they're paying a couple extra percentage points on income over a million dollars. And if the trade-off is better public services and a more functional city for everyone, maybe that's worth it.

Still, there's risk. Even if most wealthy residents stay put, losing a handful could create noticeable budget gaps given how concentrated the tax base is. It's not an irrational concern, even if the evidence suggests it's overblown.

For decades, New York has shaped its policies around keeping financial elites happy. The city has bent over backward to attract and retain them. Mamdani's proposal flips that script and asks a different question: What if wealthy residents contributed more so the city could invest in services that benefit everyone else?

It's a significant shift in philosophy, and whether it happens depends on Albany. New York City can't change its tax structure without state approval, so Mamdani will need to convince state lawmakers that this is a good idea. That's a whole different battle.