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(NEW YORK) — New York City Mayor-elect Zohran Mamdani, a democratic socialist who says he wants to hike taxes on the rich, set off alarm among some critics about a potential exodus of wealthy people bent on keeping their money out of government coffers.

As the warning goes, a tax increase at the top could drive away affluent New Yorkers and undercut revenue meant to fund proposals like universal child care, free city buses and publicly owned grocery stores.

John Catsimatidis, the billionaire owner of grocery chain Gristedes, told the Free Press in June he may “consider closing our supermarkets and selling the business” in the event of a Mamdani victory. Neil Blumenthal, the co-founder and co-C.E.O of eyewear company Warby Parker, said, “I will never move from New York, but there’s a lot of other people that will and are leaving New York.”

Even Democratic New York Gov. Kathy Hochul, who ultimately endorsed Mamdani, warned in an interview in June about the possible departure of the wealthy set. “I don’t want to lose any more people to Palm Beach,” Hochul told local outlet PIX 11, underscoring her opposition to a tax increase.

Studies show a race for the exits of this type is highly unlikely, experts at Northwestern University, as well as research organizations the EU Tax Observatory and the Tax Foundation, told ABC News.

Similar tax increases in states like California have typically pushed out a small number of wealthy people, the experts said, but the vast majority stay put for reasons that hold true across income brackets: They like where they live, and want to remain close to friends, family and professional networks.

“There is tax-induced mobility. It’s not non-existent but it’s very small,” Quentin Parinello, policy director at the Northwestern University as well as research organizations the EU Tax Observatory and the Tax Foundation, told ABC News.

“In New York and other big metropolises, people want to be somewhere they can go to the theater, they can have business opportunities, they can hire talent,” Parinello added.

Mamdani says he will put forward a 2 percentage point tax increase for residents making more than $1 million, which would raise the tax rate for high earners in New York City from roughly 3.9% to 5.9%.

The mayor-elect has also proposed hiking the corporate tax rate from 7.5% to 11.5%, which would put New York in a tie with New Jersey for the highest state corporate tax rate nationwide.

“These things together raise about $9 billion, which more than pays for our economic agenda,” Mamdani told ABC’s “Good Morning America” this month.

When asked whether he is concerned the taxes could drive job creators out of New York, Mamdani said: “What I’ve heard from a number of business leaders is that the affordability crisis is also affecting their ability to attract and retain talent. The city’s inability to provide child care means that businesses often have to provide stipends for that child care.”

Both tax measures would require state legislation bearing Hochul’s signature.

Studies from researchers at Stanford University, the Treasury Department and the non-partisan Fiscal Policy Institute show minimal departures among the rich in response to tax increases.

Researchers at Stanford University and the Treasury Department in 2016 examined tax records belonging to all million-dollar earners in the U.S. over a 13-year period, finding “tax flight is occurring but only at the margins of statistical and socioeconomic significance.”

In 2023, the Fiscal Policy Institute examined movement among high earners in the aftermath of a New York state income tax hike two years earlier.

“There is no statistically significant evidence of tax migration in New York,” the study found.

“Movement of rich people on the basis of tax differentials is relatively small,” Jeffrey Winters, a professor of equality development and globalization studies at Northwestern University who studies high earners, told ABC News. “It’s very common for them to threaten to move. The risk is grossly overstated.”

Jared Walczak, vice president of state projects at the non-partisan Tax Foundation, voiced opposition to Mamdani’s proposed tax hike, saying the policy risks a gradual erosion in the high-earner tax base and revenue losses that would accumulate over time.

“The city won’t empty out if taxes rise, but on the margin you expect some people to move,” Walczak told ABC News.

“That hurts the city and the state because these individuals are already paying a lot of taxes and creating a lot of jobs,” Walczak added.

Winters, of Northwestern University, said the focus on wealthy residents risks overlooking the cost-of-living challenges that force low- and middle-income New Yorkers to move elsewhere.

“We are worried about the outflow of the very wealthiest people in major cities like New York when in fact the biggest outflow of people is among those who can’t afford even the basics of staying there,” Winters said.

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(NEW YORK) — President Donald Trump has repeatedly touted the opportunity for U.S. companies to extract and sell oil from Venezuela, which holds the largest oil reserves in the world.

“We’re going to be taking out a tremendous amount of wealth out of the ground,” Trump said on Saturday, just hours after a U.S. military attack removed Venezuela President Nicolas Maduro.

Venezuelan oil, however, will likely provide little relief for gas prices paid by Americans over the coming months, analysts told ABC News. They cited the relatively small amount of oil at stake in the near term and the glut of crude already flooding global markets.

A more substantial amount of oil could be accessed over the coming years, leading to a potentially noticeable decline in prices at the pump, they added. But that outcome remains uncertain, since oil companies face significant political and logistical hurdles in Venezuela, while wider market conditions could shift in the meantime.

“I would not expect to see a sharp drop because of this event,” Richard Joswick, head of near-term oil analysis at S&P Global Commodity Insights, told ABC News.

Oil executives are set to meet with President Donald Trump at the White House on Friday to discuss investments in Venezuela, a White House official confirmed to ABC News.

Venezuela boasts the biggest proven oil reserve of any country, amounting to roughly 303 billion barrels or about 17% of the world’s reserves, according to the U.S. Energy Information Administration, or EIA, a federal agency.

For decades, however, the nation has struggled to match those holdings with similarly stratospheric output due to lackluster infrastructure and government mismanagement.

Venezuela exported about 749,000 barrels per day last year, totaling less than 1% of global supply, according to data and analytics company Kpler.

In a social media post on Tuesday, Trump said Venezuela would hand over 30 to 50 million barrels of oil to the U.S., which in turn would sell them at their market price. The resulting funds — as much as $2.8 billion at current prices — will “benefit the people of Venezuela and the United States,” Trump said.

Trump has not provided details about the timing of such sales.

The plan proposed Tuesday would likely have little or no effect on U.S. gasoline prices, analysts told ABC News. The amount of oil stipulated by Trump is relatively small, making up the equivalent of between one-third and half of the oil consumed worldwide in a single day, according to data compiled by the EIA.

“Short term, I don’t think we’ll see much of an impact,” Tucker Balch, a finance professor at Emory University, told ABC News. “It’s not a lot of oil right now.”

Even more, oil prices are hovering near their lowest levels since 2021, meaning it will prove difficult to bring prices down further anytime soon, analysts added. Low oil prices stem from a glut of oil alongside relatively slow global economic growth, which has constricted demand for fossil fuels.

“There’s an oversupply and weak demand. More crude won’t make a big difference in the overall price,” Ramanan Krishnamoorti, a professor of petroleum engineering at the University of Houston, told ABC News.

After the military operation, Trump outlined a long-term role for U.S. oil companies in Venezuela, saying the firms would spend money to improve the nation’s infrastructure and output.

“We’re going to have our very large United States oil companies — the biggest anywhere in the world — go in, spend billions of dollars, fix the badly broken infrastructure, the oil infrastructure,” Trump said during a press conference on Saturday at his Mar-a-Lago residence in Palm Beach, Florida.

A U.S.-led effort to extract and sell the massive Venezuelan oil reserves could inject a substantial amount of oil into global markets and noticeably reduce gasoline prices, some analysts said.

Venezuelan oil production topped out at 3.5 million barrels per day in the 1990s, Kpler said. A return to that output would amount to about 4% of global oil supply, S&P’s Joswick, adding that the influx could push down gasoline prices.

“Prices are set on the margin and small imbalances in volume can lead to large shifts in prices,” Joswick said.

A long-term venture would encounter challenges, however, some analysts said.

The infrastructure necessary to ramp up oil production would require tens of billions of dollars of investment over several years, while oil companies involved in the effort would face political risks, according to analysts.

Chevron is currently the only U.S. oil firm operating in Venezuela, as part of a joint venture with the country’s state-owned oil outfit.

ExxonMobil and ConocoPhillips stopped doing business in Venezuela in 2007, after former President Hugo Chavez nationalized the sector. Citing the unlawful seizure of assets belonging to the two oil giants, the World Bank’s International Center for Settlement of Investment ordered Venezuela to pay the firms billions of dollars. Venezuela has only paid a small share of the debt it owes to ExxonMobil and ConocoPhillips.

The policy approach in Venezuela is uncertain over the coming years, while the same goes for the U.S. as a presidential election approaches in 2028, Krishnamoorti said.

“It’s unlikely the oil companies are going to take the bait to go after some significantly difficult oil to produce in a very uncertain U.S. policy and global policy situation,” Krishnamoorti added.

Joswick noted, however, that possible success in accessing Venezuelan oil over the next few years could be a “big incentive for the continuation of similar policies.”

While touting potential U.S. oil interests in Venezuela, the Trump administration has described the operation as a law enforcement function rather than a military attack.

Maduro and his wife, Cilia Flores, are among six defendants named in a four-count superseding indictment that accused them of conspiring with violent, dangerous drug traffickers for the last 25 years. Maduro was indicted on related charges in 2020. He has long denied all the allegations, and he pleaded not guilty on Monday. Flores also pleaded not guilty.

So far, the major oil firms have yet to speak publicly about Trump’s plans.

In a previous statement to ABC News, ConocoPhillips said the firm is keeping tabs on the ongoing situation.

“ConocoPhillips is monitoring developments in Venezuela and their potential implications for global energy supply and stability. It would be premature to speculate on any future business activities or investments,” the company said.

Chevron said it continues to focus on its current operations.

“Chevron remains focused on the safety and wellbeing of our employees, as well as the integrity of our assets. We continue to operate in full compliance with all relevant laws and regulations,” it said in a statement.

ExxonMobil did not respond to a request for comment.

ABC News’ Mary Bruce contributed to this report.

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(NEW YORK) — The Federal Reserve on Wednesday is set to announce its latest decision on the level of interest rates, marking its first rate move since news surfaced of a federal criminal investigation into Fed Chair Jerome Powell.

The investigation ratcheted up an extraordinary clash between the nation’s top central banker and the White House, which has urged the Fed to significantly reduce interest rates.

The central bank is widely expected to defy President Donald Trump’s wishes, opting instead to hold interest rates steady. The anticipated move would end a string of three consecutive quarter-point rate cuts, aligning with a cautious approach outlined by Powell last month, before reports of the investigation into his conduct.

“We’re well positioned to wait and see how the economy evolves,” Powell said at a press conference in Washington, D.C., on Dec. 10.

Futures markets expect two quarter-point interest rate cuts this year, forecasting the first in June and a second in the fall, according to CME FedWatch Tool, a measure of market sentiment.

The federal probe appears to center on Powell’s testimony to Congress last year about cost overruns in a multi-billion-dollar office renovation project. Powell, who was appointed by Trump in 2017, issued a rare video message earlier this month rebuking the investigation as a politically motivated effort to influence the Fed’s interest rate policy.

The investigation follows months of strident criticism leveled at the Fed by Trump. The president denied any involvement in the criminal investigation during a brief interview with NBC News hours after the Fed posted Powell’s video.

Over the past year, hiring has slowed dramatically while inflation has remained elevated, risking an economic double-whammy known as “stagflation.” Those conditions have put the Fed in a difficult position.

The central bank must balance a dual mandate to keep inflation under control and maximize employment. To address pressure on both of its goals, the Fed primarily holds a single tool: interest rates.

The strain on both sides of the Fed’s mandate presents a “challenging situation” for the central bank, Powell noted last month.

“There’s no risk-free path for policy as we navigate this tension between our employment and inflation goals,” Powell said.

If the Fed raises interest rates as a means of protecting against elevated inflation, it risks a deeper slowdown of the labor market. On the other hand, by lowering rates to stimulate hiring, the Fed threatens to boost spending and worsen inflation.

The criminal investigation into Powell raised concern among some analysts and former top Fed officials, who said it poses a threat to central bank independence.

In the event a central bank loses independence, policymakers tend to favor lower interest rates as a means of boosting short-term economic activity, analysts previously told ABC News. Such a posture could pose a major risk of yearslong inflation fueled by a rise in consumer demand, untethered by interest rates.

Federal law allows the president to remove the Fed chair for “cause” — though no precedent exists for such an ouster. Powell’s term as chair is set to expire in May, but he can remain on the Fed’s policymaking board until 2028. Powell has not indicated whether he intends to remain on the board.

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