Mamdani Will (Perhaps Unintentionally) Show Us Why We Need to Make ALL of the Rich Be Neither Rich Nor Powerful, Not Just Aim to Make Things Better for the Have-Nots With the Rich Still Rich.

David Stockman, Pres. Reagan's Director of the Office of Management and Budget, does the heavy lifting for us.

Zohar Mamdani, NYC’s new “socialist” (actually democratic socialist) mayor got elected on the basis of making a lot of promises to make life affordable for the have-nots with things such as free bus service and universal child care and cheap city-provided groceries, all funded by increased taxes on the rich.

The billionaire class wants us, the have-nots, to remain hopeless about making our lives significantly better, and for this reason wants us to believe that Mamdani-type promises can never actually come true, that “socialism just can’t really work.” To make sure that the have-nots learn this lesson, the billionaire class does things (as long as it remains in power with possession of its great wealth) to prevent Mandani-type reforms form actually working.

When, for example, the socialist Salvador Allende won election to the presidency of Chile in 1970, to the great consternation of the U.S. billionaire class and its man in the Oval Office, Richard Nixon, Nixon directed the CIA to undermine the Chilean economy to make possible a subsequent U.S. backed coup d’etat to replace Allende with the fascist General Pinochet. Wikipedia reports, “…the US imposed an ‘invisible blockade’ that was designed to disrupt the economy under Allende, and contributed to the destabilization of the regime.^[34]”

Now here comes David Stockman, President Reagan’s Director of the Office of Management and Budget, with a Substack article about, essentially, how the rich will make sure Mamdani’s promises fail to work. Stockman’s article is titled, “Zohran Mamdani—Bankruptcy Trustee For The Socialist Republic Of Gotham.”

Stockman’s second-to-last paragraph (just skim the gads of number crunching preceding it unless you love that sort of thing) reads:

In short, New York City was already teetering on the edge of financial breakdown under the current regime of top-in-the-nation spending and tax levels and business unfriendly regulation. So even a small dose of Mamdani’s “affordability” socialism is likely to send it careening over the edge.

Stockman explains that this is true because if Mamdani tries to do what he promises to do then rich people and businesses will flee New York City and take their money with them. Here are Stockman’s exact words to this effect:

…it doesn’t take much imagination to see that a socialist government at City Hall would be hard pressed to retain even the current level of revenues.

For instance, in the case of the $15 billion in annual income tax collections, the top 1%, or 34,000 of the city’s 4.2 million income tax filers, account for $6 billion (40%) of the total; and the top 10% account for $11.1 billion or about 75% of the total.

So any attempt to raise the already high city income tax rate is certain to exacerbate the substantial flight to Florida and elsewhere that is already well underway. Yet Mamdani has argued nothing to sweat because his 2% surtax, which would raise the combined city/state income tax rate to nearly 17%, would only impact that top 1% of taxpayers.

Then again, if the city were to loose just 6,000 (18%) of its top bracket taxpayers, income tax revenue would fall by $1 billion per year. And, yes, a “residence” in Florida, where the rate is 0.0% might well stimulate a stampede of tax refugees from a socialist dystopia where the rate is 17%, on top of the 37% which goes to Uncle Sam.

The near certainty of tax flight is even more applicable with respect to the current $7.7 billion of business taxes. Mamdani has proposed to raise the city’s corporate tax rate from 7.25% to 11.5%, which would generate $4.5 billion on paper. Alas, in a nation is rife with low-tax states and cities that are already campaigning aggressively for business refugees from New York City, what is likely to move is the tax base going south, not the revenue level heading north.

And when it comes to the near $35 billion from property taxes and real estate transaction taxes the potential drain is enormous. All of these taxes are collected on the basis of New York commercial and residential real estate with a market value of more than $1.5 trillion and an assessed value of $287 billion. But with tax rates on assessed value already high at about $12.50 per $100 on average, any serious recession in real estate market values would send the current $35 billion of property based tax revenue sliding southward.

And there is also Mamdani’s throwback to the 1930s. That is, a $30 minimum wage and rent freezes. These long ago discredited relics of populist paternity would surely add to the business flight to venues outside the five boroughs.

Let us draw the moral from this story.

We need an egalitarian revolution that removes the rich from power everywhere by a) removing the money from the rich and b) by removing from the rich their military forces that obey orders to attack ‘uppity’ egalitarians. (Yes, this is possible! Read the linked articles about how we can do it.)

Politicians who refuse to speak honestly about what it takes—egalitarian revolution—to stop the rich from treating the have-nots like dirt are only helping the rich persuade us that it’s not possible to do that. We need such politicians like we need a hole in the head.

Postscript: A commenter asked if the rich would really leave their fancy digs in NYC just because of a small increase in the real estate tax. I replied, “We shall see.” I added that the important point, in either case however, is that there is a limit to how much the rich will allow improvements for the have-nots to be made before they (the rich) will use their power to put a stop to it. Those who claim to lead the have-nots while hiding this key fact are not truly on the side of the have-nots.