The president of the New York Stock Exchange (NYSE) says it could be forced to move business operations to a more tax-efficient location if the state legislature imposes a tax on share transfers, according to an editorial published yesterday in the the Wall Street newspaper.
So much financial companies open new offices in states like Tennessee, Florida and Texas, the president of the NYSE Stacey Cunningham argued that the New York City Commerce Temple could follow suit if the share transfer tax passes. She pointed out that the securities industry generated 18 percent of state tax collections last year. However, that share could drop significantly if a new share transfer tax were to push companies away from the city.
“The NYSE understands what COVID-19 has done in New York City,” Cunningham wrote. “Our head office is in Manhattan. Most of our employees live in the region. We own homes, eat out, and pay our taxes in New York. We all want city and state to emerge from the pandemic stronger than ever. This is why we are opposed to the return of the transfer tax. The last thing we want to do is leave a place we love, especially because of the wrong policy. “
The transfer tax is not a new concept. It originally came into effect in 1905 and was effectively phased out in 1981 when the state instituted a 100 percent tax rebate. the Citizen Budget Commission recently found that had the transfer tax been reinstated last year, it would have generated $ 4 billion, significantly less than advocates’ annual projections of $ 13 billion in potential tax revenue.
The idea of the transfer tax is also somewhat outdated. The tax only applies to transactions made in New York State. With most stock transactions taking place online, it can be difficult to tell where a transaction took place. Most NYSE servers are already located out of town in Mahwah, NJ
Last fall, when New Jersey threatened to collect its own share transfer tax, the exchange processed a small percentage of its trades. on its servers in Chicago, just to show he could do it. Two other exchange operators, Nasdaq and Cboe Global Markets (CBC), also said they would leave New Jersey if the state instituted the tax.
And the tax would not only affect traders and hedge funds. Both CBC and Cunningham pointed out that he would increase the cost invest in index funds for a child’s retirement or college education.
Governor of New York. Andrew CuomoThe office also seems reluctant to reinstate the tax on share transfers. At a press conference in January, the state budget director Robert mujica noted, “If we increase the tax like that, you mobilize people, you potentially move your transactions and your servers to another part of the country where these taxes don’t exist. “
The Senate and State Assembly are currently considering several proposals to repeal or reduce part of the transfer tax rebate. Brooklyn State Senator. Zellnor Myrie, for example, introduced a bill that would reduce reimbursement from 100% to 60% and place the income in a general fund for housing and economic development. Another proposal would repeal the reimbursement completely and direct the income to various sources, including the Metropolitan Transport Authority and specific infrastructure funds for roads, bridges and water systems.