New York Financial Groups Urge State Leaders to Oppose Stock-Transfer Tax Proposal
04 February 2021 - 6:41AM
Dow Jones News
By Jimmy Vielkind
ALBANY, N.Y. -- Major financial exchanges and securities
industry groups on Wednesday urged New York state lawmakers to not
support a proposal being pushed by some Democrats and unions to
impose taxes on stock sales.
In a letter to Gov. Andrew Cuomo and leaders of the state
Assembly and Senate, the exchanges said any tax would prompt the
relocation of securities industry firms and jobs out of New York
and would also be passed along to investors and public pension
funds. The letter's 27 signatories include Nasdaq Inc., the New
York Stock Exchange, groups representing downstate businesses and
the Securities Industry and Financial Markets Association, or
Simfa, which represents financial firms.
"Such a tax would damage New York's position as a global
financial capital, resulting in shrinkage of an industry that is
the largest contributor to our economy and tax base," the letter
says.
Sifma President and CEO Kenneth Bentsen Jr. said in an interview
that the groups sent the letter because a number of new
legislators, including Democrats who support a transaction tax,
have recently taken office.
Rebecca Bailin, director of the pro-tax Invest in Our New York
campaign, said the letter showed Wall Street firms were on the
defensive and said threats to move were empty. State Assemblyman
Phil Steck, an Albany-area Democrat who supports a stock-transfer
tax, said any impact on individual investors would be minuscule
compared with the positive effects of additional state spending on
infrastructure.
Mr. Steck estimated the tax could generate around $11 billion a
year for the state.
"This is a progressive sales tax," he said.
New York enacted a stock transfer tax in 1905 but stopped
collecting it in 1981. Democratic legislators have introduced bills
for more than a decade to reimpose the tax -- which runs as high as
5 cents on a share priced at $20 or more -- but none have come to
the floor. Supporters of a stock-transfer tax say it would raise
additional revenue as the state confronts a budget deficit.
Both state Assembly Speaker Carl Heastie, a Democrat from the
Bronx, and Senate Majority Leader Andrea Stewart-Cousins, a
Democrat from Yonkers, said they were considering a financial
transaction tax to raise more revenue for education and other
social service programs funded by the state. They are negotiating a
budget agreement with Mr. Cuomo; the state's current budget expires
on March 31.
Mr. Cuomo, a Democrat, proposed increasing income-tax rates last
month as he addressed an $8.2 billion deficit in a $193 billion
budget. His budget director, Robert Mujica, said at the time that
the governor didn't support a financial transaction tax and that
the pandemic showed that people could easily move business
operations. A spokesman for the governor said he would review the
letter.
No other states tax financial transactions, which members of the
securities industry have lobbied against at the federal level. In
September, NYSE threatened to move electronic trading systems out
of New Jersey if the state implemented a tax on financial
transactions, which had the support of the state's Democratic
governor, Phil Murphy.
An October report by state Comptroller Tom DiNapoli found
182,100 New Yorkers were employed in the securities industry in
2019, but the state's share of industry jobs has fallen to 19% in
2019 from one-third in 1990. Mr. DiNapoli, a Democrat, estimated
the industry was responsible for 17% of economic activity in New
York City and accounted for 18% of state tax revenues.
Write to Jimmy Vielkind at Jimmy.Vielkind@wsj.com
(END) Dow Jones Newswires
February 03, 2021 14:26 ET (19:26 GMT)
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