Wealth Taxation: Implications and Debates

Budget blues. The administration of New York City Mayor Zohran Mamdani and City Council Speaker Julie Menin have agreed to push back the May 1 deadline for presenting an executive budget proposal, as they work out how to close the city’s $5.4 billion shortfall, Politico reports.

Moreover, they plan to jointly request additional state budget aid and to push for changes to the state’s pass-through entity tax (PTET), which, they contend, could raise an extra $1 billion in revenue, The City’s Katie Honan reports.

The announcement tomorrow with @nycmayor and @SpeakerMenin will be for more state aid through AIM, a change to PTET tax that should generate $1B, and a budget extender to go beyond May 1 Due to late state budget, per sources

— katie honan (@katie_honan) April 28, 2026

The mechanics are somewhat intricate, but the PTET essentially represents a voluntary state levy that certain business sectors can pay, which is then offset by state income tax credits granted to the owners of those businesses, with the aim of reducing their federal tax burden.

A Manhattan Institute briefing by E.J. McMahon notes that nearly all beneficiaries of the PTET are high earners, which helps explain why Mamdani would target it.

The mayor ran on a platform of raising taxes on high earners and large corporations to fund a broad slate of new programs. In practice, the city’s fiscal reality has pushed him to pursue those taxes primarily to cover existing obligations.

Regrettably for Mamdani (and perhaps timely for others), New York City cannot independently raise income or corporate taxes; the state must grant approval for such increases.

And Governor Kathy Hochul has so far resisted allowing the city to raise business and personal taxes. She has, however, floated a levy on second homes valued above $5 million, which she claims would bring in up to $500 million annually.*

The proposed revision of the PTET to boost revenue reads as another tactic to “tax the rich” without broad-based income tax hikes.

More money, more problems. The essential takeaway as the budget skirmish in New York City unfolds is that the trouble isn’t going away, regardless of how much Mamdani squeezes out of tax increases this year.

The city faces a stubborn, widening budget gap driven by the ever-escalating cost of existing programs. The Citizens Budget Commission, a fiscal watchdog, projects the gap could reach as high as $10 billion in the coming years.

Addressing today’s deficit merely delays the next round of revenue needs in the years ahead, setting up a repeat scramble. And there are diminishing returns to leaning on big business and the ultra-wealthy; on the margins, they may decide to relocate. New York’s millionaires account for under 1 percent of taxpayers but contribute roughly 37 percent of the city’s personal income tax receipts.

Mamdani must decide whether to ask residents at large to fund the government they already have—and the larger one he campaigned to build—through broad-based tax hikes, or to identify where he can trim city spending without undermining his socialist ambitions.

Cashing in. The lobbying firm Ballard Partners is leveraging its proximity to the Trump administration to attract clients seeking oil contracts in post-Maduro Venezuela, according to a new investigation by the Project on Government Oversight (POGO).

Here’s a sample from the report:

Ten days after Maduro’s capture, on January 13, Ballard Partners unveiled a dedicated Venezuela Working Group and highlighted the involvement of “former high-ranking government Trump administration officials” on the firm’s team.

That same day, Ballard registered Swedish investment group Maha Capital as a new client seeking help obtaining “approvals for Venezuelan oil field acquisitions and operations.” Micah Ketchel and Thomas Boodry, former Trump aides who have also worked for Rubio, were listed among the lobbying team. Maha Capital paid Ballard $120,000 in Q1 2026 to lobby both the State and Treasury departments.

On March 18, the Treasury Department’s Office of Foreign Assets Control (OFAC) approved U.S. entities to conduct business with Venezuela’s state-owned PDVSA, clearing the way for Maha Capital to operate inside Venezuela. In a press release that day, Maha Capital’s chief executive said he was “pleased” with the decision, and the firm announced plans to acquire a stake in a Venezuelan oil field and transfer that stake to its U.S.-based subsidiaries to comply with OFAC requirements.

Former President Donald Trump has been forthright about prioritizing the resumption of Venezuelan oil flows after Maduro’s capture. The type of influence-peddling described by POGO isn’t surprising in that light, and it undercuts the claim that removing Maduro significantly advanced American security or Venezuelan freedom.

Scenes from Washington, D.C.: Air travel hubs are generally comfortable and clean spaces, even as they remain saturated with a pervasive, paternalistic bureaucracy. It’s hard to imagine a setting where ordinary people feel more watched, controlled, and propagandized.

The particular flavor of surveillance that caught my eye while passing through Ronald Reagan Washington National Airport yesterday was this poster in the men’s room urging vigilance for signs of human trafficking.

These are some rather odd human trafficking signs meant to alert the public. It’s not obvious to me how a traveler could determine, simply by looking, whether the person accompanying a child is a legitimate guardian or merely someone with ill intent.

Perhaps the intended readers are security personnel or airline staff who might glean more details while on the job. If that’s the case, though, why place these notices in public restrooms?

The sensible takeaway from the PSA above is limited—it seems unwise. In the worst case, it could prompt travelers to flag plausible trafficking cases that are, in reality, extremely rare and not visible to the naked eye.

From time to time, there are news items about airline passengers who are mistakenly accused of trafficking a relative, which can be a devastating ordeal for the accused. Postings like these can contribute to more wrongful accusations.

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