Topline
The New York Stock Exchange warned Tuesday that it may leave the state if the legislature imposes a tax on stock transfers, escalating a fight with Democrats who argue the move would help address a historic budget shortfall.
Key Facts
“If Albany lawmakers get their way. . . the center of the global financial industry may need to find a new home,” NYSE President Stacey Cunningham wrote in a Wall Street Journal op-ed. Last Wednesday, Cunningham and more than 25 other representatives of the securities industry wrote to state legislative leaders to caution against a proposal to place a tax on certain financial transactions, including from investment banks and hedge funds.
The tax proposal, which would apply to transfers of stocks, bonds, and derivatives, comes as Albany faces a sharp decline in revenue because of the coronavirus pandemic.
Democrats behind the bill said it would help make up for lost revenue and denied that the NYSE would need to move if it were passed.
Crucial Quote
“The stock exchange will not leave New York—one of the largest financial centers on earth—if we pass this bill, which would levy very minimal taxes on specific financial transactions, a policy that has long been implemented by other thriving financial centers around the world,” New York state Senator Julia Salazar, who sponsored the bill, said in a statement to Forbes.
Key Background
New York Governor Andrew Cuomo has not signaled support for stock transfer taxes and instead sought to balance the budget through a proposal for higher income taxes. When asked about the NYSE’s reaction to the stock tax proposal, a Cuomo spokesperson pointed Forbes to comments from State Budget Director Robert Mujica: “It’s a different world now, right. Before, you could tax the transfers and stocks and the transactions because they occur in New York, in the tri-state area. Today, as we’ve seen with the pandemic, people can do business anywhere. They don’t have to do it in New York City, they don’t have to do it in New Jersey, they can do it from their homes. So if we increase the tax like that, you mobilize people, potentially just move your transactions and your servers to another part of the country where those taxes don’t exist.”
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February 10, 2021 at 05:26AM
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New York Stock Exchange Threatens To Leave New York Over Proposed Stock Transfer Tax - Forbes
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