Letter from Edward Mermelstein: Safeguarding New York’s Global Competitiveness

Dear Colleagues,

As New York City’s former Commissioner for International Affairs, I’ve spent much of my career examining how global economic shifts intersect with local realities. Few cities embody this intersection more vividly than New York, a metropolis whose influence rests not only on its cultural dynamism but also on its ability to attract and retain the world’s top talent and investment.

With the 2025 mayoral election approaching, I feel compelled to share a candid assessment of the road ahead. If a candidate aligned with democratic socialist priorities, such as citywide rent freezes, fare-free public transit, and substantially increased taxation on high earners, were to secure victory, we could face an unintended but serious consequence: a measurable outflow of wealth, talent, and business activity.

This concern is not hypothetical; it is supported by global data. New York today is home to roughly 384,500 millionaires, the highest concentration of high-net-worth individuals anywhere in the world. These residents form the backbone of the city’s fiscal health, with the top 1% of taxpayers contributing an estimated 40–50% of total income tax revenue. That revenue sustains essential services, infrastructure, and public programs that benefit all New Yorkers.

Policies that aggressively target this group through new or expanded taxes risk altering the delicate balance that keeps our city economically competitive. When faced with higher taxes and diminishing quality-of-life incentives, many high earners simply relocate, to states like Florida or Texas, where tax burdens are lighter, or to global destinations such as the UAE and Singapore, which actively court international talent and investment.

We’ve seen comparable scenarios unfold elsewhere. In the United Kingdom, recent tax reforms led to a record 16,500 millionaires leaving in 2025, draining the national tax base and triggering ripple effects across real estate, investment, and employment markets. Similar patterns have emerged in France and California, where steep tax increases prompted outmigration that ultimately eroded public revenues rather than strengthening them.

For New York, even a modest shift in residency among top earners could cost billions in lost tax revenue, funds that underpin everything from education to climate resilience initiatives. Beyond the fiscal implications, such trends could also cool the city’s housing and commercial property markets, slow job creation in high-growth industries like technology and finance, and dampen entrepreneurial activity that has long fueled our recovery cycles.

This is not a partisan warning, it’s an economic reality. A thriving city must remain both equitable and aspirational, ensuring fairness without discouraging those who drive innovation, investment, and employment. The challenge before us is to balance social progress with economic vitality, crafting policies that uplift without alienating, and that attract rather than repel the world’s brightest minds and boldest investors.

As New York approaches this pivotal election, I encourage an informed, civil dialogue among policymakers, business leaders, and residents alike. The question before us is not whether to pursue equity, of course we must, but how to achieve it in a way that sustains opportunity for all.

What are your views on preserving New York’s allure as a global hub for talent, creativity, and capital, while ensuring the city remains a place of shared prosperity?