New York State MPs want to introduce a financial transaction tax. The head of the New York Stock Exchange puts the rod in their window.
Manhattan without the New York Stock Exchange? Inconceivably. But New York City was not always the center of the financial world: Amsterdam held this title before it was transferred to London in the early 1800s. The head of the NYSE, Stacey Cunningham, introduced her text in the “Wall Street Journal”, which made waves around the world: “The NYSE is not moving – not yet,” is the title translated.
In it, Cunningham threatens that the stock exchange could turn its back on the venerable address of Wall Street 11. If lawmakers got their way, the center of the global financial industry could be forced to find a new home. She and 25 representatives of the financial sector sent a corresponding letter to members of parliament.
The background is a tax on stock transactions, which some MPs of the state of New York want to revive. Because New York needs money: US media report an expected budget deficit of 17 billion dollars (14 billion euros) this year. The transaction tax was introduced in 1905. In 1981 it was quasi suspended by introducing a one hundred percent discount. The state does not collect the tax today. “If the tax were to be reinstated, New York would be the only state to collect such a tax,” said an October article in (online) magazine City & State NY.
New York with a big budget deficit
This harbors two risks: On the one hand, it can be assumed that the share tax does not bring in as much as assumed because it is easy to circumvent. On the other hand, the tax could lead to a significant industry leaving the state, the comment said.
The stock exchange boss Cunningham also suggests this in her text. The lessons of history are clear: if you try to squeeze more revenue out of financial firms, business will go elsewhere. The companies and dealers are connected globally and electronically. In the pandemic, the exchange has proven “that we can close the physical trading floor at any time and still maintain the service without restrictions,” she writes.
New York government is skeptical
Some members of the state parliament have introduced a draft law with which they want to revive the tax on certain stock transactions. However, the state government is skeptical, according to a Reuters report. Budget director Robert Mujica said in January that the pandemic had shown that business can be done anywhere. Such a tax could lead to the servers and transactions being simply relocated to parts of the country where the tax does not exist. So he is in line with the stock exchange boss. Financial transaction taxes would damage capital markets and destroy high-paying jobs, writes Cunningham. (here)
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