No new tax regime for some Americans tax payers in 2026? Here's what is coming instead

Taxing New Yorkers who earn more than $1 million a year to pay for a universal child care system was a central promise of Zohran Mamdani's successful campaign for New York mayor -- an idea that the politically moderate governor, who faces her own election fight this year, did not embrace.


Two months later, New York Governor Kathy Hochul has endorsed a child care expansion but is holding the line on taxes -- and Mamdani doesn't seem to mind. He has made a point of applauding her pledge to allocate nearly $1 billion more this year from existing revenue and an additional $425 million the following year to begin expanding child care across New York City.



It is the clearest sign yet that a mayor elected as a political outsider is willing to govern more pragmatically than some of his critics expected -- and perhaps more than some of his supporters and allies would like.


Raising taxes on the rich is a core uniting principle of the Mamdani coalition, which includes the Democratic Socialists of America; Rep. Alexandria Ocasio-Cortez of New York and Sen. Bernie Sanders of Vermont, his political role models; and many mainstream Democratic voters fed up with the nation's affordability crisis.


But in private conversations, aides to Mamdani, who is himself a democratic socialist, made clear to Hochul's advisers in December that he would happily accept money she was willing to offer in lieu of raising taxes in her reelection year.


As mayor in 2014, Bill de Blasio was eager to pay for expanding prekindergarten by taxing wealthy New Yorkers. After a protracted debate, Andrew Cuomo, then governor, quashed the idea and funded pre-K without raising taxes.


The dispute kick-started a yearslong rivalry, an acrid dynamic both Mamdani and Hochul want to avoid.


Nathan Gusdorf, executive director of the Fiscal Policy Institute, a center-left think tank, said new taxes will eventually be necessary for child care to become a permanent sweeping entitlement. But he favors modest tax increases for most New Yorkers, not just the wealthiest residents. "We couldn't have public schools if only millionaires paid taxes, and the same logic should be extended to child care," he said.


Other observers of the state's budget process praised Hochul for keeping her promise not to raise taxes this year.