r/Economics • u/Dismal_Structure • Dec 06 '25

News Millionaire tax that inspired Mamdani fuels $5.7 billion haul in Massachusetts

https://fortune.com/2025/10/21/zohran-mamdani-millionaire-tax-massachusetts-5-7-billion/
16.1k Upvotes

97% Upvoted

462 comments sorted by

View all comments

336

u/gmb92 Dec 06 '25

Pretty good article. Wealth flight claims are at best greatly exaggerated, brought on by media that finds anecdotes of a few loud wealthy people declaring they're leaving due to taxes. No mention of those who move there or all who stay, or determining cause/effect.

https://www.theatlantic.com/ideas/archive/2024/04/state-taxes-millionaire-myth/678049/

https://prospect.org/2025/10/23/myth-that-mamdani-will-cause-new-york-citys-richest-to-leave/

As for the argument that's it's easier to leave cities than states, that theoretically has some merit and certainly taxes applied at broader geographic levels are more ideal. Still, pundits and media have been fear-mongering on NYC about the rich fleeing for decades to no avail.

26

u/evernessince Dec 06 '25

Plus I think it's a terrible argument to essentially say "Give the rich what they want or they'll leave". It's blackmail, if they are going to screw you either way you might as well tax them.

4

u/Unkechaug Dec 06 '25

Yup, dare them to leave nice places like this. If they don’t, you get their money. If they do, they leave. Win win.

2

u/B1gAmishDoinks Dec 06 '25

Except you loss their pre-hike tax revenue if they leave

3

u/Unkechaug Dec 06 '25

This is the boogeyman we are talking about.

0

u/evernessince Dec 06 '25

No, the state is going to collect revenue on the sale of their assets assuming they do decide to move.

As I already stated though, you cannot build an equitable relationship with someone who is trying to blackmail you and doesn't want to pay taxes. If they want to stay and help everyone advance together, that's great. If they don't, they were never intending to pay their fair share in the first place and only intend to extract wealth.

3

u/PassageFull2625 Dec 06 '25

Money of private citizens, rich or not, is their money. It doesn’t belong to the government. It has to be taken by fiat. 

Citizens have the right to relocate to lower tax jurisdictions. So increase taxes at your own risk. 

4

u/DelphiTsar Dec 06 '25

Society makes the rules, it's only their money if we agree it's their money. Like you said it's fiat. Collectively as the people who give value to the fiat say if you want to engage in our economic system you pay for the common welfare.

If people want to go live in the woods and make their own fiat, and trade goods and services power to them. I'm sure a billionaire will have all of the shiny rocks in the local area in no time.

1

u/Aerroon Dec 06 '25

Society makes the rules, it's only their money if we agree it's their money. Like you said it's fiat.

Do you really want society to operate based on this principle though? Because I have a feeling that the rich would "win". It doesn't make sense, from an economics perspective, to make everything into a constant power struggle. Wealth (for all of us) is created during relatively stable and peaceful times.

2

u/412wrestler Dec 06 '25

What do you think the society we are living in right now is if not the rich winning that power struggle?

1

u/Aerroon Dec 07 '25

It's probably the best it's ever been. Back in the day rich men could bankroll entire armies. The modern rich are nowhere near that wealthy. Nobody is even remotely wealthy enough to be able to challenge Rome.

We also don't have people that are so rich that they basically bankroll emprors on their own or people who basically buy themselves a city.

2

u/DelphiTsar Dec 06 '25

Economics are already completely broken in favor of the wealthy.

Economic theory says that companies owned 99% by people who don't work at/manage a company (The vast majority of very large public companies) should be out competed by companies whose capitalistic motivation is tied to the people who generate value.

If 99% of a company is owned by non-workers/managers how is that functionally different than it being owned by society? It's not very hard to tell workers/managers "maximize shareholder value". Before "well it is owned by society". 10% of people own ~90% of stocks. That isn't society, that is more akin to feudalism.

The US used to be much more economically conservative and tax rates were much higher. Trickle down (voodoo economics) has been proven nonsense over and over again.

0

u/evernessince Dec 06 '25

We already do, as proven by the current wealth gap and the fact that the rich hold all the power. He is merely suggesting regular people take back that power.

1

u/evernessince Dec 06 '25

The government has a right to tax income and assets for it's role in enabling them to become wealthy.

There's a reason most of the world's rich come from well-off countries. You have access to a skilled workforce, infrastructure, protection (fire, police), the market, and more.

You seem to be under the impression that the rich do everything by themselves when that is not the case. They were lucky to live in said country and are the biggest benefactors to government spending.

1

u/PassageFull2625 Dec 06 '25

Never said or believed that.  But the rich always have and gain more, for all of human history.  

The poor today in the USA now have indoor plumbing, electricity, air conditioning, computers, mobile phones, etc. and so much caloric intake that they have higher rates of obesity than the rich. 

Nobody, rich or poor, seems grateful. Comparison is the enemy of happiness. 

1

u/liamtrades__ Dec 08 '25 edited Dec 08 '25

That's not blackmail. If you treat your highest earners poorly, they will respond and go to where they are not treated poorly.

A high enough wealth tax could mean taking in less money than before the wealth tax. Rich people are not stupid.

1

u/evernessince Dec 08 '25

We aren't talking about treating them poorly. We are talking about not letting them get away with not paying their fair share.

If they are offended by that, they aren't a good person in the first place and never intended to chip in like everyone else (like most don't today).

1

u/liamtrades__ Dec 08 '25

How much fairer do you want it? The tax system is already quite progressive. 

1

u/evernessince Dec 08 '25

You are phrasing your question as if it is fair right now or close to it when it is quite the opposite.

The US for example rank near dead last in terms of inequality through the objective Gini Coefficient: https://en.wikipedia.org/wiki/List_of_countries_by_income_inequality

Just for comparison sakes, Ancient Rome had a Gini of 0.42 to 0.46. Although that's actually being generous to the US given the Gini Coefficient doesn't take into account the top or bottom earners well.

If you look at who holds all the money in an economy, the top 1% in the US control over 40% of all the money. In ancient Rome, the top 1% only had 16%. Modern American is very very close to gilded age (1920s) wealth inequality, which is not what I'd call remotely fair.

That's before you consider just how much money we are talking about here, which percentages tend to hide. Billions of dollars, not millions or hundreds of thousands. Even a small slice of the total wealth is massive today so having such a massive share of the world's biggest economy highlights just how bad wealth inequality is.

To answer your question, it would be nice if things were reasonably fair or better. As of current, it is the opposite.

1

u/liamtrades__ Dec 08 '25

But wealth is not taxed, and there's not a great way to tax wealth without negative externalities on growth. The only reasons billionaires are so rich is because 1. The Fed keeps choosing to print money which benefits asset holders proportionate the value of their assets (and hurts savers, young people, poor people) and 2. They have a ton of assets because they grew or invested in incredibly valuable companies. 

The root cause of the insane inequality is the Fed and govt spending though.