Reasonably Optimistic Tax the rich! But then what?
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May 8, 2026 A debate over taxing the ultrawealthy and the political backlash that follows. A look back at 1970s New York fiscal collapse and lessons from municipal decline. How suburban flight, industrial loss and pension burdens reshaped cities. The threat that remote work and mobile wealth pose to urban tax bases and who must adapt to keep cities thriving.
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Campaign Promise Met With Flight Risk
- Zohran Mamdani ran for New York mayor promising universal childcare, rent freezes, free buses, city grocery stores, and to "tax the rich" to pay for it.
- Megan McArdle recounts immediate pushback as billionaires and firms signaled they might leave, risking jobs like Citadel's planned $6 billion expansion and thousands of construction positions.
Growing Up Through New York's Fiscal Crisis
- Megan McArdle describes growing up in 1970s New York while her father worked in city government and watched policy decisions contribute to urban decline.
- She details events like rising crime, massive manufacturing job losses, and the 1975 fiscal crisis that led to receivership and austerity including wage freezes and service cuts.
Sticky Residents Hide Slow City Decline
- Cities that don't maintain fundamentals like public order, sustainable tax bases, and schools face slow decline because residents and businesses are 'sticky' but eventually leave.
- McArdle compares neglecting foundations to fixing wall cracks instead of a home's foundation: cheap short-term fixes accelerate long-term collapse.