By Ed Ra
A new mayor in New York City brings a bold new agenda, and with it a familiar demand for billions more dollars from Albany to make it happen. Mayor-elect Zohran Mamdani’s signature promise of universal child care, projected to cost up to $14 billion when phased in statewide, is just one example. To fund these ambitions, Gov. Kathy Hochul is reportedly considering raising the state’s corporate tax rate, potentially to as high as 11.5 percent. This is unequivocally the wrong path for a state already struggling to keep residents, employers and investment from leaving.
It’s worth a reminder that corporate tax hikes don’t just target “big business” or Wall Street giants. They ripple outward to mom-and-pop shops, family-owned businesses, manufacturers, contractors and every employer trying to keep the lights on and payroll met. When the cost of doing business rises, companies have little choice but to pass it on through higher prices, fewer hires or relocations to business-friendly states. In a competitive national economy, taxes matter at the margin. New York state is losing that fight.
The Tax Foundation’s 2026 State Tax Competitiveness Index drives this home. New York state ranks dead last — 50th out of 50 — in overall tax climate. This isn’t a one-off ranking, either. We have occupied the basement for years, to the point where it’s expected. The index evaluates more than 150 variables across corporate, individual income, sales, property and unemployment insurance taxes to assess how well states structure their tax systems. Our corporate tax component fares slightly better, at 28th, but that’s hardly encouraging when the overall structure repels investment and growth.
Raising corporate rates would only widen the gap between New York and competitor states like Florida, North Carolina, Texas and Utah, which have no income tax or far lower burdens. We can’t pretend that businesses stay in New York out of loyalty. They stay where they can grow.
Remember, we’re losing people. We’re losing businesses.
New Yorkers are voting with their feet and relocating in record numbers. I’ve said it before, and it bears repeating:
Our annual rock-bottom ranking on the index reflects exactly why jobs, families and businesses continue to leave. When proponents talk about increasing the corporate tax rate, they ignore how fragile our business climate already is.
Advocates for higher taxes argue that we need revenue for equity-focused programs like universal pre-K and child care. They’re not wrong to want those outcomes, but punishing businesses isn’t the only way, and definitely not the smartest way, to get there. We can deliver for families without desecrating our economic climate.
Instead of reflexively reaching for tax hikes, Albany should focus on growing the pie. Making New York more attractive to job creators would be a good start. We should also simplify the tax code by eliminating outdated, burdensome provisions like the lingering capital stock tax base. We should streamline permitting and regulations that choke small businesses and delay projects. And we should prioritize investment in the infrastructure that actually moves people and goods, such as roads, bridges, transit corridors and freight routes that support commerce and growth.
But growth alone isn’t enough if we refuse to rein in spending. New York’s state budget has exploded to more than $258 billion, despite a shrinking population. Since Hochul took office in 2021, spending has increased by nearly $50 billion. That is not fiscal discipline. Year after year, more money is poured into programs with little oversight or accountability. New Yorkers aren’t getting their money’s worth, and they know it.
New York is already among the most heavily taxed and most expensive places to live and do business. Imposing more taxes isn’t the only path to more revenue. Instead we need to reposition our state to strengthen what works and cut what doesn’t. Fraud and waste must be rooted out.
Overlapping agencies should be consolidated. Unnecessary bureaucracy should be reduced, and outdated programs reformed. Eliminating inefficiency is how we eliminate our excessive reliance on taxing New Yorkers into oblivion.
Ed Ra, of Franklin Square, represents the 19th Assembly District, and is the ranking Republican member of the Assembly Ways and Means Committee.
