Jack Mintz: Mamdani's socialist agenda will take a bite out of the Big Apple

Yahoo

a day ago

Polls in the U.S. and Canada show that the cost of living remains the top concern for voters. Pew Research Center reports inflation and the affordability of health care are rated as 'big problems' by almost two-thirds of Americans surveyed, while three-fifths of Canadians list the cost of living as the top issue in an Abacus July poll.
The affordability agenda opens the door wide for far-left politicians to win elections. Zohran Mamdani, leading contender for New York City mayor and backed by 107 left-wing politicians and organizations, makes this crystal clear on his website: 'The cost of living is crushing working people but Zohran believes that government can lower costs and make life easier in our city.'
Like any good socialists, Mamdani's affordability agenda delivers a host of freebies to the broad public, paid for by taxing the rich and corporations. Sounds familiar, no?
He will freeze rents in stabilized apartments and spend $100 billion on 200,000 new social housing units over the next 10 years, 70 per cent financed by municipal debt. (All dollar amounts are in $US.) Another $800 million will enable New Yorkers to ride buses for free in new priority lanes. A new Department of Community Safety (cost $1.1 billion) will address subway and street safety, mental health, gun violence and hate. It will deploy outreach workers at 100 subway stations to greet people.
And why not start young New Yorkers down the path of socialism, too? No-cost child care will be provided from six weeks through five years of age. Newborns will get free baby baskets. Columbia and NYU, already reeling from Donald Trump's endowment levies, will be taxed to cover the cost of free tuition at City University of New York (CUNY).
State-operated grocery stores will be established while subsidies will be withdrawn from private grocery stores. The no-profit public grocery stores won't pay rent or property tax, to drive out price-gouging businesses. Were he alive today Karl Marx would be delighted by this state takeover of the 'means of production.'
To help realize the socialist dream, New York's minimum wage will almost double by 2030: rising from US$16.50 to US$30 per hour.
How will all these affordability costs be covered? With $10 billion more per year in taxes. An estimated $5 billion will come from raising NYC's corporate income tax rate from 8.85 to 11. 5 per cent, which, combined with federal and state corporate levies, will give NYC the highest corporate tax rate in North America — yes, Canada included. Another $4 billion will come from a two per cent tax hike on personal income over $1 million and a further $1 billion from tax and fine enforcement and 'smart' procurement.
Given these simplistic promises to lower the cost of living by making somebody else pay, it's no surprise Mamdani is leading in the polls. The promises are a lot easier for Mamdani to make than it is for non-socialists to explain why they won't work.
In fact, some of the ideas will make life even more unaffordable. Freezing rents will kill the incentive to supply new rental housing or repair what already exists. Over time, that will worsen housing shortages and raise prices even more. Free child care also sounds great until it leads to supply shortages, as we have seen with our $10-a-day program. Free bus fare will shift passengers from the subway to the bus, likely cramming them in like sardines in a can. Almost doubling the minimum wage will result in many low-skill workers losing their jobs.
Grocery stores that operate without at least some profit won't be able to replace old equipment or hold inventory. Besides, it takes experience and knowledge to compete with Walmart. In Baldwin, Fla., and Erie, Kan., municipal grocery stores were initially welcomed by the public, only to fail miserably.
Tax hikes almost certainly won't raise the amounts projected for them. Continent-highest corporate income tax rates will drive companies and profits out of the city. The personal tax hike may also lead to a decline in the tax base. New York City has been losing population since 2020, with 631,000 residents and $13.7 billion fleeing to low-tax states like North Carolina, Pennsylvania, Florida and Texas in 2021 and 2022.
We Canadians know a lot about the democratic socialist agenda. The New Democratic Party pushes for new entitlements to be paid for by corporate tax hikes and wealth taxes. B.C.'s NDP government has increased every conceivable tax over the past decade even as its deficits have climbed to $9.4 billion, the highest of all provinces.
Justin Trudeau's Liberal government pushed the socialist agenda, too, with new entitlement programs for child care, dental care and pharmacare in the past decade, all partly funded by a four-point income tax hike in 2016 on earnings over C$200,000 (which in U.S. dollars is a miniscule $150,000). Canada now has the highest personal income taxes in the G7 countries and, not surprisingly, has seen many people leave over the past decade, headed to lower-tax countries.
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The socialist affordability agenda is politically attractive right up until the economy starts sinking. That's when the population figures out that free stuff is not so free after all.