An analysis of Mamdani's supermarket plan
By Timothy Jones
web posted November 17, 2025
Zohran Mamdani, recently elected mayor of New York City, was put into office on his grandiose promises of giving back to the people of New York City. Focusing on a truly important matter to all Americans, and certainly those inhabiting New York City, affordability was the key to his campaign. But how does Mamdani plan to cut prices in the fifth most expensive city in the U.S.? The short answer: government. One of Mamdani's central plans, to build grocery stores on government property that are tax exempt and also are not profit-seeking, is aimed at decreasing the cost of groceries, which make up a significant portion of the cost of living in the city. However, while the proposal sounds simple enough abstractly, multiple questions arise as to how the economy will be impacted, which I will try to address in the following.
The primary issue that emerges with Mamdani's plan is funding, plain and simple. The mayor stated that the $60 million in funds needed for the initiative would come from increasing the corporate tax rate to 11.5% and taxing those inhabiting the city who make $1 million or more an additional 2%, along with the income taxes they already pay. However, as economists know, in the long term high taxes generally decrease the supply of money because there is less incentive to work and make money, which in turn decreases both the amount of money saved and invested in the economy. Additionally, since tax rates have been high in New York City prior to the election of Mamdani, the top one percent of earners have already been struggling. According to The Daily Economy, the top one percent of earners in New York City already pay two-thirds of the total income taxes collected. Furthermore, property taxes for primarily residential dwellings were nearly 20% starting in 2021.
The results have been seen. In the past few years, 125,000 New Yorkers have migrated to Florida, where the state income tax is 0%. New York City, as is seen, has been facing economic challenges prior to Mamdani. So what are the entailments of Mamdani's policies? Beyond government-run grocery stores, Mamdani plans require billions of new funds. In order to accomplish this, the effect on those earning more than $1 million in the city would be a combined city and state tax rate of nearly 17 percent, excluding property taxes, along with an additional 37% required to the federal government. So the reality is that someone who makes $1 million living in New York City would have to pay nearly $540,000 to the city, state, and federal governments. When you also account for sales taxes and property taxes that person will also pay throughout the year, this figure rises significantly. And when there is a mass exodus of the wealthy from New York City, as was seen when similar plans were enacted in cities such as San Francisco, the middle and low classes will be unable to provide the funding for Mamdani's plans and the economic status of the city will greatly decline.
Beyond the glaring problem of funding Mamdani's proposals bear, his grocery store plan poses a threat to the many New Yorkers whose livelihoods depend on the grocery business, from store owners to regular employees. Prior to the election of Mamdani, New York City was already subsidizing private grocery stores who were still recovering from the COVID-19 shutdown of 2020 and struggling to make a profit. The inclusion of state-run grocery stores will likely put many of these out of business for the simple reason that Mamdani's stores have no incentive to compete. They will not have to face the reality that private stores face of paying property taxes and rent. They will not have to face the reality of making a profit either, they can simply sell at the price they buy at wholesale. For these reasons, private grocers will likely suffer, and perhaps go bankrupt, because inhabitants of New York City will simply buy at the state-owned stores to save money and avoid the private stores.
In conclusion, Mamdani's plan of state-run grocery stores faces numerous challenges, a few of which appear insurmountable. His plans in total require nearly $10 billion in funding, and the idea of simply raising tax on the rich in the city appears unrealistic. Furthermore, if these grocery stores could be funded and constructed, many of the privately owned grocery stores will have no chance to compete and likely go bankrupt, creating more unemployment and affordability issues. 
This is Timothy Jones first contribution to Enter Stage Right. (c) 2025 Timothy Jones.
