Mamdani’s tax the rich slogan is ‘just as hateful’ as racial slurs, New York real estate titan says

Steven Roth, the CEO of real estate giant Vornado, was sharply critical of Mayor Zohran Mamdani. (Misha Friedman/Bloomberg/Getty Images via CNN Newsource)

NEW YORK — No one likes higher taxes. But New York City Mayor Zohran Mamdani’s plan to tax wealthy residents’ second homes has elicited a highly emotional response from two of the city’s richest.

“Creepy and weird,” is what Ken Griffin had to say Tuesday at a conference about Mamdani’s campaign-style video touting the tax outside the hedge fund manager’s US$238 million penthouse.

Steven Roth, the CEO of real estate giant Vornado, went further Tuesday on an earnings call.

“I consider the phrase ‘tax the rich’ when spit out with anger and contempt by politicians both here and across the country, to be just as hateful as some disgusting racial slurs and even the phrase, ‘from the river to the sea,’” Roth said, referring to the pro-Palestinian phrase that the Anti-Defamation League labels an antisemitic threat.

Mamdani announced a plan last month to tax New York City’s luxury second homes with market values above $5 million, saying it would fulfill his central campaign promise to “tax the rich.” He singled out Griffin’s penthouse as a prime example of the “fundamentally unfair system” that allows the city’s richest to store their wealth in homes that sit empty most of the time without paying city and state income taxes.

Business leaders have rallied to Griffin’s defense and said Mamdani’s video endangered his safety.

“We are all shocked that our young mayor would pull this stunt in front of Ken’s home and single him out for ridicule,” Steven Roth said. “The ugly, unnecessary video stunt is personal for Ken and sort of personal for me.” Vornado is one of the largest real estate companies in New York City and is currently developing a new office tower with Griffin’s hedge fund Citadel.

The rich who Mamdani and other political leaders target “are the epitome of the American dream” and the largest employers and philanthropists, Roth said. “They are at the top of the great American economic pyramid for a reason. They should be praised and thanked.”

Mamdani’s office responded, saying the mayor wanted all New Yorkers to succeed, including business owners and Griffin, “who is a major employer in our City and a powerful figure in our economy.” But that does not negate the fact that the tax system is “fundamentally broken” and needs to be reformed to make New York City more affordable.

Most New York City business leaders fiercely opposed Mamdani, a democratic socialist, during his campaign last year. Since he entered office this year, some have warmed to him and consider him to be pragmatic. But the video, which came out three weeks ago, has outraged many of the business class. They say that hostility toward the rich will drive out businesses and wealthy taxpayers from New York City.

Griffin, at a separate event, said Tuesday that the video was “creepy and weird” and New York “doesn’t welcome success” under Mamdani. Citadel plans to expand in Miami over New York City in response to the video, he said.

He compared New York to Chicago, where Citadel was previously headquartered. Griffin moved Citadel out of Chicago in 2022, citing crime and anti-business sentiment.

“Looking at what Mamdani did to me and more broadly is doing to the city of New York is triggering the trauma I went through in Chicago,” Griffin said.

A pied-à-terre tax could generate approximately $500 million annually from an estimated 11,200 second homes, according to the city comptroller.

The political clash in New York comes as other cities and states attempt to raise taxes on the wealthy. Similar political cycles are playing out over the impact these taxes will have and the risks of the wealthy fleeing.

Massachusetts passed a surtax on income over $1 million in 2022, and Washington State and Rhode Island plan to tax income over $1 million. California voters will soon decide on a measure to tax billionaires in the state.

Opponents, including Silicon Valley magnates like Google co-founder Sergey Brin, have poured tens of millions of dollars into efforts to block the tax.

By Nathaniel Meyersohn, CNN