Obama (left) and Mamtani. 

It has been four months since 34-year-old self-proclaimed "democratic socialist" and "Muslim" Zoran Mamtani took office as Mayor of New York. New York, which has been a Democratic stronghold for the past 20 years, seems to have officially begun its accelerated trajectory, carried by the winds foreshadowed by Mamtani's election. 

Last month, on the 15th, a "Tax Day" event was held near Central Park in Manhattan, New York. Mayor Mamtani and New York Governor Kathy Hochul presented a new tax proposal that would impose additional taxes on "second homes" valued at over $5 million (approximately 7.3 billion won). During this event, the penthouse of Ken Griffin, CEO of Citadel, was cited as a prime example of a negative case. 

In a video he posted, filmed in front of CEO Griffin's penthouse, Mamtani criticized, "The majority of New Yorkers are suffering, while the wealthy leave their homes vacant for most of the year." The logic completely disregards the personal circumstances of large corporation CEOs and the fact that they may have multiple residences due to various work-related needs. It also ignores situations where it's difficult to rent out properties due to inconsistent times and durations of stay.

About a week after "Tax Day," Gerald Beeson, Chief Operating Officer (COO) of Citadel, expressed strong dissatisfaction in an email to employees. 

COO Beeson wrote, "We understand that our efforts and success can often be the target of political rhetoric. However, this should not undermine the pride we take in building a company that will contribute to New York's prosperity for decades to come." He also highlighted Citadel's planned large-scale office construction project in Manhattan, New York, reminding them that it would "support the creation of 6,000 high-paying jobs and over 15,000 permanent jobs." 

The Wall Street Journal (WSJ) noted that COO Beeson emphasized that the project would involve an expenditure of over $6 billion (approximately 9 trillion won). The WSJ pointed out the possibility of a review of Citadel's New York office construction project, and in the worst-case scenario, delays or reviews of various New York redevelopment projects. 

“Socialist New York”… Capital Flight

Wall Street investment titans have successively expressed their opposition to Mamtani's tax increase proposal. Daniel Loeb, a prominent figure in the hedge fund industry, tweeted on his X (formerly Twitter) account, "Governor [Hochul] is competing to win the 'Florida Real Estate Agent of the Year Award'." He sarcastically implied that wealthy individuals would flock to Florida, the closest and most suitable alternative to New York, which is a Republican state. 

Billionaire investor Bill Ackman also stated on X that Ken Griffin's expenditure of $238 million (approximately 350 billion won) for his penthouse in New York City was "something to be applauded, not attacked." He added, "Citadel is a major employer in New York City, providing high-paying jobs that generate significant tax revenue. Many of its employees do not wish to relocate to Miami [Florida]." 

Citadel's plan to relocate its New York office was already announced in June 2022, with "worsening public safety" cited as a primary reason. Citadel's headquarters completed its move to Miami, Florida, in 2024. Its office in Chicago, which had been under Democratic mayors for nearly 100 years, was also reportedly closed down by the end of last year. These developments simultaneously reveal shifts in financial power, reorganization of urban order, and the consequences of political choices. 

New York is transforming from a state/city that "checks the rich" to one where "the rich are leaving." In the federal nation of the United States, individual states function like nations, but unlike international borders, they present "easily surmountable barriers." People can move to find better conditions. The departure of large corporations and high-net-worth taxpayers is followed by the exodus of employment, the real estate market, and financial networks. The collapse of the city's tax base is a natural consequence. 

Capital flees when tax rates, regulations, public safety, and the business environment reach critical points. Under the Democratic Biden administration, some hedge funds, asset management firms, and technology companies have moved to Florida and Texas. The emergence of a "socialist mayor" has only accelerated this trend. 

“Socialist New York” and “Capitalist Miami”

Mamtani's New York advocates for "a more equitable city" by prioritizing increased public housing, rent control, and enhanced wealth taxes. During last year's election, free education and free city buses were also mentioned. 

New York's transformation, shifting its image from a "land of opportunity" to a "redistribution experiment," presents an opportunity for Florida. For example, Miami, with its excellent natural environment and climate, is more than just a resort city. 

Based on pro-business policies such as relaxed corporate taxes and regulations, it is emerging as a growing hub for financial and technological capital. A significant characteristic of Florida is the large number of immigrants from Latin America who have fled communism and socialism. A decisive advantage is that its politics do not antagonize capital. 

Although New York has an overwhelming advantage in all aspects—culture, finance, and talent—the conclusion is clear if its current direction persists. 

Major European cities have followed a similar path. Paris, France, experienced severe capital outflow due to high tax rates and stringent regulations. While London, UK, has maintained its position as a financial center, it has lost competitiveness due to tax and regulatory issues. All have faced similar realities at the end of expanding welfare, strengthening labor regulations, and increasing taxes on high earners. Western Europe, once an object of global admiration, has declined in a similar fashion without exception. 

The diverging destinies of New York and Miami are likely to materialize faster than in the case of European metropolises. This is because there is no border between New York and Miami. 

◆ Park, Im-myeong 

Ph.D. in Chinese Studies, Northeast Asian Researcher

Former Deputy Bureau Chief of International Affairs, SKY Daily