New York Picked a Fight With Its Billionaires. It May Regret It.

[00:00:00]So, there's a building here in Manhattan, 220  Central Park South. And inside this building, on one of the top floors, there's an apartment that  sold for $238 million. That's the most expensive home ever purchased in the United States. It has  a view of Central Park that almost nobody on Earth will ever see. And this is the man who bought  it, Ken Griffin, one of the wealthiest people alive. And he doesn't live there. He just owns  it. It's basically a hotel room that he bought for just a quart billion. And just recently, the  new mayor of New York City walks to that building, stands on the sidewalk outside of it, looks up at  the apartment, and announces a new tax. It felt kind of like a movie. I'm thrilled to announce  we've secured a pet to tear tax. The scrappy mayor from Queens is taking on the billionaire class,  making them pay what he says their fair share in the greatest city in the world. Except there's a  number that nobody really mentioned that day. And that number changes everything. But to understand  what is actually happening in New York City right now, we need to understand who is Zoron Mandani  and what he actually ran on. He's 33 years old, son of Ugandan filmmaker, grew up in New York.  He was a state assemblyman from Queens and he ran for mayor on one of the clearest, most unambiguous  platforms of any politician in recent memory. Tax the ultra wealthy, make billionaires pay for  the city that they profit from. And New York City loved it. He won convincingly. The signature  policy out of that campaign is called the pedare tax. Pedare is French. It literally means foot  on the ground. It refers to a secondary residence like an apartment or home you keep in a city but  don't actually live in. And in New York City, that means something very specific. It means a  hedge fund manager in Greenwich keeping a place in Tribeca for late nights. It means a tech  billionaire buying a floor on the 57th Street as an investment. It means Ken Griffin spending  $238 million on a penthouse he visits once in a while. The new law doubles the property tax on  any residential property worth over a million that is not the owner's primary home. State lawmakers  passed it May 28th, 2026. The mayor stood outside Griffin's apartment to announce it. The plan  bring in $500 million a year in new revenue.

[00:02:11]And then I looked up the other number. New York  City has a 12.6 billion budget hole. right now.

[00:02:16]Hold on. $ 122.6 billion. Let me say that again. $  122.6 billion. That is a $2.2 billion short in the current fiscal year and another 10.4 billion  projected for next year. Those numbers come straight from the city's own comproller. Now,  let's hold these two numbers next to each other for a minute. So, the billionaire tax could raise  $500 million. The budget hole is 12.6 billion.

[00:02:41]That means the tax that was announced on a  sidewalk. Kind of like a heavyweight championship moment. The one with the cameras and the symbolism  and the most expensive apartment in America, that covers about4 of every dollar the city  actually needs. 4. Picture the budget gap as a $100 bill on a table. The mayor just picked up  $3.90. $9610 is sitting there and nobody at that announcement mentioned it. But here's the question  that I can't stop thinking about. Why? Why build an entire political movement around a solution  that only covers 4% of the problem? The answer to that question tells you almost everything about  how power works in this city. Because here is what makes this whole story kind of strange. The  12.6 billion hole has almost nothing to do with billionaires. Let's go back to 2020. CO hits. The  federal government does something it has almost never done before. It sends cities a massive  flood of emergency money. billions of dollars designed to keep cities from collapsing during  a once- ina- generation crisis. New York got a huge chunk of that money. And the city does what  cities do. It spent it, built programs around it, hired people with it. It set a spending baseline  that assumed that level of funding would keep coming. And then the emergency ends. The money  stopped, but the spending did not. On top of that, the previous administration, Eric Adams and his  team had a consistent habit of underestimating expenses when building the annual budget. Every  year, the real costs came in higher than what was projected. Every year, the gap quietly grew,  and nobody was forced to stand up and say, "We have a serious problem here." Mani's  own political ally, controller Brad Lander, flagged this gap publicly in August 2025, right  in the middle of the campaign. It got very little coverage because the story of federal emergency  money drying up and chronic expense underbudgeting doesn't have a villain. It doesn't have a building  that you can stand in front of it and talk about.

[00:04:34]But a $238 million penthouse has a villain. And  that's a much better story. But here's where the story gets a little bit complicated. This is  the part I think most people covering the story don't fully hit because New York City cannot  just tax its billionaires. It actually needs its billionaires. Structurally, mathematically, it  needs them. The top 1% of earners in New York City pay roughly 50% of all the personal income tax the  city actually collects. Half of the entire income base is concentrated in a tiny group of people.  So, when the city works financially, a large part of that is because of billionaires. And that group  can leave in a way that most New Yorkers cannot. A subway conductor cannot move to Texas and get a  job by next week. A public school teacher can't relocate their career to Florida overnight. Their  lives are usually rooted in ways that make leaving a lot harder. I mean, a hedge fund manager can  be a resident of Florida by this Tuesday. And some of them are going, not because of Mumani  specifically. I mean, this started before him.

[00:05:33]In March of 2025, Goldman Sachs quietly tells its  managers, "Move to Dallas or Salt Lake City or find a new job." Many of them moved. And by April  2026, the Goldman CEO confirmed on the record that thousands of New York City jobs are relocating  to Texas. Now, Goldman Sachs by itself does not tank New York City's economy. Let's be honest,  Goldman isn't the point here. The point here is the signal. See, every CEO sitting in a Midtown or  downtown office tower right now watched one of the most prestigious firms in the world publicly  officially move thousands of jobs out of New York. And now when that CFO's board asks, "Hey,  why are you still paying New York rent and New York taxes?" The answer got a lot harder to give.  Okay, so here's the situation. A mayor declares war on the exact group of people that funds half  the city budget. At the exact same moment, some of those people are already heading for the exit,  and the tax he just passed covers only 4% of what he needs. Now, this is the moment of the story  that really kind of gets me. After the campaign, after the sidewalk announcement, after the  historic win and the new law and all of it, Mumdani quietly sits down with Jaime Diamond,  the CEO of JP Morgan, one of the most powerful bankers on Earth, and David Solomon, the CEO of  Goldman Sachs, the same firm moving thousands of jobs to Texas. So, there's a private meeting,  barely any coverage, almost no one talks about it. Think about what that actually means for a  second. The man who built his entire political identity around making billionaires pay is  now sitting across a table from two of the most powerful billionaires in the country having a  quiet conversation about the city's finances. You could easily read that as hypocrisy. I mean, a lot  of people would see it that way, but I actually think it's the most honest moment in the entire  story because the math here eventually shows up.

[00:07:17]You can run a campaign on a story about villains  and heroes, who owes what to whom. And that story can be true enough and powerful enough to win you  the election. But then you walk into the mayor's office and the budget is 12.6 billion short and  half of your revenue is sitting in Jaime Diamond's rolodex and you have a meeting. So I don't think  you sold out in this case because you're governing a city of 8 million people and the math doesn't  actually care about your campaign narrative. It cares about that budget gap. But what actually can  close a 12.6 6 billion gap. There are three main things. The first is federal money. New York gets  $7.4 billion a year from Washington, and right now that number is actively in play. If it gets cut,  the gap only grows. The second is property tax reform. Here's something most people don't know. A  co-op in Manhattan pays a fraction of the property tax that a rental building in the Bronx may pay.  Same city, but completely different rules. Fixing that could generate billions but obviously piss  off a lot of people in the process. It means telling wealthy homeowners in Brownstone Brooklyn  and the Upper West Side Mandani voters that their tax bill is going up. The third is spending.  The city added about 30,000 workers between 2019 and 2024. Cutting them would be a human  decision about who gets hurt, who loses their job. And the people who feel it first are never  the people at the top. None of these options are easy cells politically. So Ken Griffin still owns  this penthouse. He's paying more taxes on it now, and he's doing it from Florida. Goldman Sachs  is in Dallas. The mayor is having quiet dinners with bank CEOs, and New York still has 12.1  billion left to find. The story isn't over.

[00:08:55]It's actually kind of just getting started. And  the next chapter is going to be crazy interesting.

[00:09:00]Drop your take in the comments. I want to know  what you think. While you're at it, make sure you subscribe to this channel. It helps me out  massively. And I'll see you in the next one.