Last year’s elections invited the most outside spending in New York’s history to support former Gov. Andrew Cuomo’s failed mayoral campaign. New York’s wealthiest rushed to form super PACs in a more than $50 million effort to oppose Zohran Mamdani and bolster Cuomo.

They were motivated by a number of factors, including Cuomo’s business-friendly politics and Mamdani’s openness as a democratic socialist in the country’s financial capital. But some of the greatest concern seemed devoted to Mamdani’s advocacy for a tax hike for millionaires to fund his major policy proposals.

“I don’t want to lose any more people to Palm Beach,” Gov. Kathy Hochul told PIX 11.

Such concerns are not new in the city. Previous campaigns to tax the rich have generated the same backlash, not just from the wealthy but from mainstream economists. After the last major tax hike on high-income earners in 2021, the number of millionaires increased.

Still, a flank of billionaires – including a cosmetics company heir, a casino mogul and former mayor Michael Bloomberg –  injected millions of dollars into Mamdani’s opposition, threatening a capital flight from the city if he were successful.

Experts have dismissed the notion that a tax hike at the rate Mamdani has asked for – 2 percent for those making over $1 million – would provoke an exodus from the city. The wealthiest of them enjoy the services of wealth managers and government tax breaks that keep their true tax rate approaching zero, while their net worth continues to grow exponentially.

It is less clear, then, why wealthy people spend so much on miniscule losses for themselves, at the expense of potential gains for those less fortunate.

Small studies have suggested that wealth changes the way one perceives others on a fundamental level. It might affect how likely you are to pay attention to other people or how you might make split-second decisions. Poorer drivers might be more likely than wealthy drivers to stop for someone in a crosswalk.

But none of them are definitive. Researchers have trouble understanding the billionaire class as a socioeconomic group because there are relatively few of them. There are just over 900 billionaires in the United States, about a third of all billionaires in the world, with a combined net worth of nearly $7 trillion, according to a Swiss wealth manager. (Only about 120 billionaires live in New York.)

They’re an elusive group, said Manny Galvan, a social psychologist at New York University who studies the psychology of wealth and inequality.

“There’s good reason to think that billionaires have categorically different ways of thinking about the world,” he added. “They live in a different kind of world.”

The greatest difference – and what might inspire the ultrawealthy’s reticence to higher taxes – is a belief in meritocracy.

As people become wealthier, they become increasingly convinced that their good fortunes are a product of their own actions, rather than the socioeconomic conditions they are born and raised in. And because they believe that inequality motivated them to work hard, they support policies and ideologies that would increase the inequality around them, punishing the poor with bank fees, work requirements for food aid and soaring health care premiums.

Experts believe this belief in meritocracy has given wealthy people permission to engage in unethical and high-risk-taking behaviors that, paradoxically, are associated with the lower classes. Addiction, laziness and absent families are all apparent among the billionaire class, with the archetype of a billionaire emanating particularly from the loud eccentricities of Silicon Valley figures like Elon Musk, Mark Zuckerberg, Sam Altman and David Sacks. But they do not inspire a moral panic in the same way the eccentricities of poor Americans do.

As inequality increases, billionaires have also changed how they spend. Gone are the days of often old, often oil-backed, philanthropic wealth that has been a keystone for the billionaire’s public image. Where the wealthy once defined their legacies with large donations that put their names on cultural products like university buildings and museum wings, the emerging tech billionaire class increasingly invests in the short-term promises of right-wing electoral politics and A.I. data centers. After stock market regulations were imposed in response to the 2008 financial crisis, the rate of companies going public fell, meaning more wealth is being consolidated into the hands of fewer people.

Eric Mercadante, a social psychologist at New York University, offered a simpler explanation for why the rich would spend so much to oppose Mamdani: greed.

In his research, Mercadante found that people, generally, want to keep what they have and get more elsewhere. This can develop greedy personalities across socioeconomic strata that lead them to seek new material possessions and hoard them from others.

But the rich – who have greater access to lucrative careers, disposable income and politicians – can more easily engage in greedy behaviors for their own self-interest, with more consequences falling on society as a whole. 

It manifests similarly to addiction, Mercadante found. Just as addictive behaviors provoke euphoric responses in the addicted person, greedy people receive a surge of “pride” when they accumulate more wealth. That pride quickly dissipates, motivating them to seek out more material gains. 

“You can make an argument that at lower socioeconomic levels, that’s a more rational disposition to take, because you should objectively need more,” Mercadante said. “At higher economic levels, it becomes irrational. Getting more is going to give you less of a return.”

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