Randy Credico does a dead-on Rudy Giuliani impression, once lit up a joint in the state Capitol and has a story about snorting coke with Red Foxx.
But he desperately wants his 2013 New York City mayoral run to be taken seriously—particularly because he thinks he has a way to pay for the kind of sweeping, New Deal-style program that just about everyone else has given up on. He'd do this by using revenue that New York State already collects, at least on paper, and then gives away, to the tune of $14.5 billion a year.
Credico is a comedian who entered the New York political fray in the early 2000s as an advocate for reform of the Rockefeller drug laws and ran as a leftist insurgent against Sen. Chuck Schumer in 2010. On a Wednesday in early May, Credico is sitting at the Crab Bar (a restaurant on Park Avenue South that Credico considers his unofficial campaign headquarters) sipping a beer, looking over the paperwork his treasurer has prepared for registering with the campaign finance board, talking to civil rights lawyer Norman Siegel about a mayoral forum the next day that Credico, as usual, was being excluded from.
He thinks the reason for his exclusion is because he speaks uncomfortable truths—about the way the U.S. drone war is stoking anti-American sentiment that makes New Yorkers less safe, about the “slave auction at 100 Center Street,” a reference to the racial skew in the city's criminal courts.
Credico knows he is … well, unlikely to be our next mayor. He'll be lucky if he even makes the ballot. Like many of the Quixotes who mount futile campaigns for mayor every four years, Credico's running to promote a big idea—one that, a few years ago, you didn't have to be a comedian to contemplate.
The stock transfer tax
Credico proposes solving the city's “unemployment crisis” by “launching a massive FDR-style jobs program” that, in part, would work to repair the city's aging street and transit infrastructure . He'd pay for it with “a small tax on Wall Street stock transactions.” His campaign literature notes that, “the city used to have one.”
Technically, it still does. In 1905 the state imposed a stock transfer tax that in 1966 became a city tax. During the fiscal crisis, a surcharge was added to the tax to help fund the city's recovery. Soon the city began to wind the tax down, hoping to improve its business climate.
Since 1981. the full value of the tax has been rebated to those paying it. But the state still tracks what would have been collected under the tax; it was $14.5 billion in 2012. The tax is based on the value of the stock being traded: for stocks valued at $5 a share or less, it's a 1.25 cents per share. For stocks valued at $20 or more per share, it's 5 cents a share.
In 2005, the Democratic frontrunner in the mayor's race, Fernando Ferrer, proposed reinstating the tax at a much lower rate to help pay for increases in school funding mandated by the Campaign for Fiscal Equity decision, which had documented systematic underfunding of city schools and demanded that the state and city figure out something more equitable.
(As it turns out, according to the Education Law Center, the CFE debt to city students is still outstanding. Since 2005, per pupil spending by the city has risen 45 percent. State and federal spending per pupil have fallen.)
The main criticism of Ferrer's idea was that it would reduce stock market volume and drive financial business away from New York City as investors sought lower-cost ways to make money. While a tax of pennies per share doesn't sound like a lot, it means millions to trading houses dealing in huge volume. Since overall trading costs are much lower now than they were in the 60s and 70s, the tax would hike investment fees considerably.
If trading volume decreased, so would stock transfer revenue—not to mention revenue from sales taxes related to Wall Street businesses, income taxes on brokers' bonuses, and so on. And the finance sector might employ fewer people. In 2003, the city's Independent Budget Office (IBO) determined that a stock transfer tax of half its old rate would cost 60,000 private-sector jobs, and raise $2.9 billion in revenue, which could pay for 28,000 new public-sector workers. That assumed simply a slowdown in business. If the financial industry actually moved jobs out of New York to avoid the tax, IBO said, the job losses would be worse.
Through 2007, IBO included the restoration of the stock transfer tax in its annual list of 50 ways the city could increase revenue or reduce spending. It hasn't appeared since. While two of this year's mayoral candidates—John Liu and Bill de Blasio—have called for raising or imposing new taxes on the rich, no one has dared to touch the idea of a stock transfer tax.
New life for an idea?
But even as the stock transfer tax has receded as an idea locally, it has come to enjoy new international popularity. Referring to it as a “Tobin tax,” after the economist James Tobin, supporters see a stock transactions tax as a way to rein in global capital flows and decrease speculative investment. Since you pay the tax every time a stock is sold, it incentivizes you to sell stocks less often, making it costlier to pull off short-sales or quick flips that contribute to speculative bubbles and spectacular busts.
The European Union is considering imposing such a tax on several of its member states. “That makes this the best possible time to impose such a tax,” says Richard Wolff, a professor of economics at Umass, who Credico names as his economic adviser. “It means the single most important destination for firms looking to evade [a U.S. stock transfer] tax wouldn't make sense.”
A 2011 report by the Congressional Budget Office on the possible implications of a U.S. Stock transfer tax noted the likely loss of jobs in the financial industry.
But amid a long list of potential upsides and downsides, CBO also noted that over the long term a tax that discouraged speculative investment might promote a more efficient, productive economy. As David Weidner wrote in the Wall Street Journal last year, “a minimal transactions tax would create new forms of revenue for cash-strapped regulators and gently apply the brakes to trading run amok in the markets.”
But while the EU tax may make it easier to impose a U.S.-wide Tobin tax, critics will say that it's still folly for New York City to even consider one, since traders could move to Jersey or other states to evade it. In fact, Wall Street is already employing fewer people than it used to. There are signs that some finance jobs are moving to cities where rent and salaries are cheaper. But there's also evidence that the financial sector is automating so much of the trading process that middle-level financial jobs are becoming obsolete.
One could argue that the stock transfer tax would accelerate that trend, perhaps be a nail in the coffin for middle-level finance jobs in the city.
Or one could argue that those jobs are disappearing anyway, even as Wall Street firms reap huge profits, and that a small tax that funded better infrastructure would, on balance, be better for the local business climate. But in the 2013 campaign, we're unlikely to hear that argument.
Meet the long-shots
Credico is not alone on his obscure run. Of the 22 registered mayoral candidates, there are 10 you've heard of (Democrats Sal Albanese, de Blasio, Liu, Christine Quinn, Bill Thompson and Weiner; Republicans John Catsimatidis, Joe Lhota and George McDonald and Independence nominee Adolfo Carrion) and 12 you probably haven't.
It's easy to dismiss each and all of them. But in the 2009 general election, third-party and write-in candidates earned 35,000 votes, a piddling 3 percent of the total cast—yet only slightly smaller that the margin of Mayor Bloomberg's victory. In the Democratic primary four years earlier, Fernando Ferrer cleared the 40 percent threshold to avoid a runoff by a mere 735 votes; a long-shot candidate in that primary got 16,000 ballots. The point is, in a crowded field like the 2013 Democratic primary is likely to feature, candidates on the fringe might matter in the winner's math.
So, meet them (links are to campaign websites or, where no such site could be found, third-party information on each candidate):