Will The NYSE Leave New York Over New Taxes?
NYSE’s President has threatened to do just that.
New York Stock Exchange President Stacey Cunningham has threatened to move the exchange out of New York should a new tax plan be implemented by New York State.
In an op-ed published in the Wall Street Journal Cunningham wrote, “The New York Stock Exchange belongs in New York. If Albany lawmakers get their way, however, the center of the global financial industry may need to find a new home.”
“While New York has remained a center of gravity for the financial industry,” added Cunningham, “many employees of ‘Wall Street’ firms are migrating to Florida, Texas and other states with hospitable tax policies.”
At issue is a newly proposed transfer tax on stock sales. If implemented, such a tax would apply to transfers of stocks, bonds, and derivatives. New York State democratic lawmakers are promoting the new tax in order to help cover budget shortfalls caused by the Covid-19 pandemic. State tax revenues across America have plummeted because of shuttered businesses and people left out of work. This means fewer business taxes, income taxes and sales taxes collected while expenditures have risen as states spend a great deal to fight the spread of the Coronavirus.
New taxes in New York will harm — not help — its recovery. https://t.co/XdsxTv87Sd
— Stacey Cunningham (@stacey_cunning) February 9, 2021
New York State Senator Julia Salazar, who sponsored the bill, is skeptical, however, that the NYSE will actually move out of the state. She told Forbes, “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.”
Some observers have pointed out that in today’s world it would be difficult to collect on any new transfer taxes. They cite the fact that such transaction no longer need to be carried out within New York City itself, even if the NYSE remains there. People today can make their transactions from anywhere in the U.S. and it does not matter where they live.
New York’s budget director Robert Mujica recently stressed this very point. He said last month in a press conference that, “the only nexus you have with the stock transfer tax is the idea that the transactions occur in the state because the computer servers happen to be here.” But if you move the servers somewhere else, “you move the transaction, you don’t collect anything from the tax,” he stressed.
Whatever happens, whether a new tax is imposed or not, it is hard to believe that the NYSE would ever really move out of New York City.