Small Business Administrator Kelly Loeffler told Fox News Digital that local business owners say high taxes, rising regulation, and outmigration are eroding New York City’s competitiveness as red states attract jobs and investment.
EXCLUSIVE: As New York City considers the potential election of democratic socialist Zohran Mamdani, Small Business Administrator Kelly Loeffler is warning that the city’s economic foundation is already under strain from inflation, high taxes and regulation.
Loeffler told Fox News Digital that small business owners in New York City fear socialist policies could accelerate population loss and drive even more jobs and investment to red states.
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She said New York City’s more than 100,000 small businesses employ nearly 1 million people, making them the powerful pulse of the city’s economic heartbeat.
People walk on the sidewalk on Fifth Avenue on Sept. 16, 2023 in New York City. (Thomas Trutschel/Photothek via Getty Images / Getty Images)
« New York is the capital of capitalism and small businesses, » Loeffler said on the sidelines of the United Nations General Assembly, where she addressed the economic downside of progressive politics.
« Small businesses are very concerned about what might be coming down the road, particularly as they hear threats of socialist policies, government takeover of industries, rising regulation, rising taxes, a minimum wage that may skyrocket to $30 an hour and cost thousands of jobs, » she said, adding that New York City businesses have already witnessed an « eroding customer base. »
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It’s a decline she says has only accelerated over the past four years as people, businesses and capital relocate to red states.
Kelly Loeffler, U.S. Small Business Administrator, speaks during the 2025 Concordia Annual Summit on Sept. 24, 2025, in New York City. (Riccardo Savi/Getty Images for Concordia Annual Summit / Getty Images)
« The fastest growing states in this country are red states, while the states that have lost the most population and business are blue states, » she said.
« That’s true in New York and that’s why you see states like Texas, Florida and Georgia growing — because they have a pro-business, pro-freedom agenda that lets free enterprise flourish and lets people live their American dream. »
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Her remarks come as the 33-year-old democratic socialist continues a strong lead in New York City’s mayoral race.
New York City Mayoral candidate Zohran Mamdani waves during a town hall at Brooklyn College in New York City on Sept. 6, 2025. (Angela Weiss/AFP/Getty Images / Getty Images)
Affordability is the centerpiece of Mamdani’s campaign to run the largest city in the U.S. Yet proposals like free buses, city-owned grocery stores, and rent freezes have rattled Wall Street, drawing some of his fiercest critics.
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The clash underscores a widening divide between progressive visions for the city and the financial sector that has long powered it.
« We’ve already had this socialist experiment of runaway spending that drove inflation and massive regulation. That stopped the ability of innovative industries like artificial intelligence and crypto to flourish, » Loeffler said.
Mamdani’s campaign did not immediately respond to Fox News Digital’s request for comment.
An American flag hangs on the wall as traders work on the floor of the New York Stock Exchange at the opening bell on June 13, 2025, in New York City. (Angela Weiss/AFP/Getty Images / Getty Images)
Treasury Secretary Scott Bessent said Wednesday that Mamdani’s economic proposals risk driving New York City into financial crisis, warning that if the city turns to Washington for a bailout, it won’t receive one.
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« You can’t enact policies like this and expect to be bailed out, » Bessent said during an interview with FOX Business’ Maria Bartiromo on « Mornings with Maria. »
« And are you going to give them that bailout? » Bartiromo pressed.
« It will be the same thing that Gerald Ford said. Drop dead, » Bessent said.
