When incumbent Governor Andrew Cuomo ran for reelection in fall 2014, he faced a surprising amount of push-back on the left and the right. In the fight for the Democratic party's nomination, a strong challenge came from his left by a little known Fordham Law Professor and anti-corruption activist, Zephyr Teachout.
Teachout's Primary Challenge and the battle that ensued (which Gov. Cuomo practically refused to even acknowledge) focused on the fallout from the short lived Moreland Commission on corruption, along with her focus on inequality and gender rights among other issues.
Like Elizabeth Warren in Massachusetts, Teachout tried to focus her campaign on people before banks and framed her election challenge in a populist tone. Though in the end winning 32 counties (half of all NY counties) it was not enough to defeat the $100+ million dollar campaign war chest of incumbent Governor Andrew Cuomo.
But if Teachout left any mark on the Governor, it was a bruised image among Progressives and a sudden left turn in his rhetoric. Suddenly gender inequality, economic inequality and criminal justice reform was put front and center in the policy debates to come.
In the end, Cuomo won his Governorship and immediately set to work reneging on his most progressive promises. According to public statements made yesterday, Governor Cuomo made tax cuts his number one policy priority.
Without a doubt New York property taxes are some of the highest in the nation. If the city's taxes are high, taking into account property values make upstate New York's property taxes even higher (proportionally). Anyone living in New York on a low-wage income knows it can be extremely difficult to keep up with the steady rise in property taxes, even with the property tax cap Cuomo put into place in his first term.
But what happened to inequality? What about gender issues? Minimum wage increases? Sure this year New York's minimum wage went up to $8.75 hr and will go up another .25 cents in 2016 but it's hardly enough to undo the damage done to the minimum wage from inflation over the past three decades.
Less documented however, is Governor Cuomo's proposal to eliminate New York's Financial Transaction Tax which has, since 1981, been returned in whole directly to the traders paying for it. This amounts to a virtual moratorium on the FTT for the last 34 years.
But instead of eliminating the FTT, how about reinstituting the tax?
Governor Cuomo is a self-described "Progressive Democrat" but aside from social issues such as Gay Marriage, Abortion Rights, and the New York SAFE act, one of the nations strongest gun laws; Governor Cuomo has basically governed to the right. From his handling of unions and pension funds, to his strong propensity for Public-Private-Partnerships to woo businesses to old industrial centers like Buffalo in his "Buffalo Billions" project.
Cuomo's property tax cap has forced many towns and cities to cut public spending exponentially. But nothing speaks to pro-business than the elimination of the Financial Transaction Tax.
The way a financial transaction tax works is fairly simple. To Banks and Investment firms that engage in moderate trading, the FTT would have little effect on their end-line, but for those gargantuan high-volume traders, even a modest transaction tax of say, .01% could take its tole. It's this kind of high-volume trading and bets that helped lead to the 2008 meltdown. Slowing down this kind of high-speed high-volume trading would benefit those at the bottom by slowing down the growth of inequality.
Between 1947 and 2013 the Financial Sector grew by an astonishing 175%. A lot of this growth can be attributed to rent-seeking, or trading, buying and selling for the sake of trading, buying and selling. A modest FTT could slow the growth of this kind needless trading. I say needless because it does little to actually help or add to the economy but it does quite a lot to add to inequality.
New York is also facing a crises of infrastructure. Though hardly the worst in the nation, New York still needs massive investment in its roads and bridges. A Financial Transaction Tax could help pay for it.
Governor Cuomo is right that New York's Property taxes are far too high. I myself have friends that are paying as much as 10% or more of their home values in Property taxes every year. This can be a huge drag on the economy as middle-class families find it more and more difficult to pay their bills and still be able to pay their taxes. Again a modest Financial Transaction Tax could help pay-down a middle class tax cut.
Though a Financial Transaction Tax would hardly solve all of New York's financial problems, reinstating the FTT that's already on the books could, even if only partially, go a long way toward helping Governor Cuomo achieve his goals of lowering New York's high property taxes.
Similarly, on the Federal level, Rep. Chris Van Hollen revealed on Monday a legislative proposal to cut taxes on middle-class families by adding a very small .01% Financial Transaction Tax on traders dealing in credit default swaps, derivatives, stocks and bond purchases and sales, and more. Rep. Chris Van Hollen's proposal would also include the closing of various tax loopholes.
Wages are one of the biggest focal points of Van Hollen's proposal, included in the plan would be a $1,000 tax credit for workers, based on a sliding income scale and an additional $250 credit for savings.
The tax, which as small as it may be is expected to raise revenues by as much as $1.2 Trillion (with a T) dollars over the next decade. This is no small beans. That kind of new revenues could have a myriad of uses. With national infrastructure teetering on the edge of a disastrous precipice, some serious spending will be needed, and with many of the Bush tax cuts now permanent, paying for these projects will take some ingenuity.
So with President Obama rolling out proposals like his Community College plan and the leadership of true Progressives like Chris Van Hollen, Elizabeth Warren, Bernie Sanders and Sharrod Brown the Democrats seem to be framing the still distant 2016 elections as one focused on the lower and middle-classes that have been falling behind for decades.
This isn't something that happened since the Great Recession, as much as Republicans would love to form the narrative around that very message, the truth is that since the Reagan Administration, higher wages and increases of pay in the economy has been mostly going to the top 1% of Americans. So unless we want to live in an Oligarchy, as Bernie Sanders is fond of saying, than we will need more boldly Progressive proposals like Van Hollen's to bring America back to the 21st century.
As for Governor Cuomo here in New York, well hopefully the pressure of outside left-leaning groups will be enough for him to rethink his proposal. The Financial Transaction Tax isn't just some vague outdated policy, it will prove necessary to reign in the power of Wall Street and to raise the funds necessary to rebuild our broken New York roads, bridges and sidewalks not to mention give a boost to our sickly wages and sluggish job growth.
Maybe 2016 will show a resurgence of the Progressive Democrat and maybe even, if we're lucky, the demise of the Corperate Democrat.