Scaramucci Warns Mamdani’s Tax Rise May See An Exodus

Famous financier and former White House Press Secretary, Anthony Scaramucci, has warned at the inaugural SALT conference held in London that the newly elected mayor of New York City, Zohran Mamdani, may face an exodus of wealth crisis should he go ahead with his proposal of hiking taxes. 

Scaramucci is the founder of SkyBridge Capital and has been a consistent backer of cryptocurrency in recent years but warned individuals at the conference that should this new proposed tax increase go ahead on those in the city with annual incomes of over USD$1 million income, then wealthy individuals will look to leave the city in search of residences with less tax. Scaramucci advises that this would likely damage the wider financial ecosystem within the city and leave less money circulating throughout. Mamdani has been vocal in his left-leaning politics during his mayoral campaign, where he has promised to tax the rich in a bid to provide equity to the people of the city. 

Scaramucci is not the only one in the crypto community who has raised concerns with the newly elected mayor. Other large influencers in the crypto world have voiced their concerns. Tyler Winklevoss, the co-founder of Gemini, a crypto exchange, has advised that he believes that Mamdani’s victory and subsequent actions may see an increased rate of crime and uncertainty in the city, citing that younger generations were in for a ‘refresher on the outcome of Marxism and socialism’. Despite these large names in the crypto world piping up against the new mayor's proposed policies and general agenda, Mamdani has not actually made it clear or public where his intentions lie for the wider crypto market.

For now, newly emerging cryptocurrencies will still be allowed to operate as normal and provide a service to the people within the jurisdiction. The likes of BTC hyper, which offers a 2-layer solution by leveraging Bitcoin’s established name and providing quicker transactions with more transparency, and with lower transaction costs, have begun to thrive more under the recent Trump administration, which has markedly lessened restrictions and promoted the use of cryptocurrency in America. Recent months have seen an increase in widespread adoption of cryptocurrency in not just New York City but all over America. It is now thought that around 28% of adults in America own cryptocurrencies. 

At the heart of these concerns is Mamdani’s proposal to place a 2% tax increase on salaries over a million. This is to boost governmental revenue from the most wealthy in the city. But skeptics are claiming this will drive wealthy individuals out of the region and place jeopardy on the economy of the city. This has a particular effect on the crypto community, which relies heavily on policy and regulatory changes because of its reliance on talent, capital, and liquidity to survive. Scaramucci has advised that these wealthy individuals are not just tycoons but also offer employment to many and invest in growth throughout the city. Without them, he feels, there will be wider ripples that will affect everyone. 

Whilst Mamdani has never explicitly been against crypto in the past, time will tell how hard he will go in restricting the crypto landscape in the city. Evidence suggests he may want to restrict the use of crypto moving forward, but nothing is certain. In the past, Mamdani backed Letitia James, in called for stronger protection around crypto after Terra and FTX collapsed - something she is continuing to pursue. His view was that when these crypto companies fall, it is often the smaller investors and little guys who take the hit, not the multinationals or big investors with lots of disposable cash. 

For the new mayor, it is about redistribution and consumer protection; for some of those in the industry, it is about retaining talent and wealth with those at the top. Despite this, he is already feeling the heat from the social B-Heard pilot, which has seemingly not gone quite as well as it was expected to by policymakers. Mamdani has a lot to work through in the coming months to ensure he backs up his campaign rhetoric that won him the mayorship.