News Release

Momentum Builds for Financial Transaction Tax in NY on Tuesday

Forbes just published a piece by pollster John Zogby: “Majority Of New Yorkers Want To Collect A Century-Old Phantom Tax That Will Generate Billions In New Revenue,” which states: “For over 100 years, New York State law has provided for a stock transfer tax that essentially collects a tax on all stock transactions. For many years, after heavy lobbying by stock traders, tax money was actually collected — then immediately rebated to the firms that sold the stocks. In other words, it has been for most of its existence a phantom tax.

“Since 1982, the charade of collecting first then rebating the revenue was halted, but the stock transfer tax is still on the books as state law. So, what are we talking about in real dollars and cents? The tax translates into a 5-cent tax per share every time a stock is sold, thus in 2020, with the average trade on the NASDAQ at about eight thousand four hundred dollars, the total tax would have been around $8.80 a trade, or .1 percent — a minuscule sum anyway you look at it. Since 1982, however, New York has kept the tax on the books, but it has rebated more than $350 billion to Wall Street investors.

“Most New Yorkers are not even aware of this issue. John Zogby Strategies was commissioned by a coalition of public interest groups, unions, and Albany legislative leaders to test support or opposition of breathing new life into this phantom tax. Our poll of 704 likely voters statewide found that overall, 53 percent agreed it should be collected while only 34 percent disagreed. After arguments both in support and opposition were read to voters, agreement rose to 59 percent while opposition declined to 30 percent — a 29-point differential.”

JAMES HENRY, jsh11963@gmail.com@submergingmkt
Henry is Global Justice Fellow at Yale University and managing director at the Sag Harbor Group. He said today: “The New York State legislature is meeting Tuesday to decide what its revenue options are and Wall Street is really digging in especially because Gov. Andrew Cuomo is imperiled. They have systematically understated the Wall Street revenues that this tax would produce. … If the feds adopt a national financial transaction tax before New York State does then all the money would flow into the federal treasury. So there’s really no good argument for not doing this except that Wall Street is very nervous about this escalating into the first successful progressive tax reform in 50 years.”

Henry is co-author of the paper “Submission to New York State Assembly: the case for Financial Transactions Taxes,” which states: “In New York state, Assemblyman Rep. Phil Steck has sponsored a disarmingly simple three-page bill that would raise some $10-20 billion a year from Wall Street and plough the money into the pandemic response and the local economy, creating jobs with a fair, efficient and progressive tax.”