The New York Stock Exchange could soon join millions of residents in ditching New York state due to its implementation of progressive policies.
The stock exchange, which has famously called New York City home for centuries, threatened on Tuesday to leave the state should lawmakers in Albany impose a tax on stock transfers, a move heralded by Democrats as a way to address the state’s grave financial situation.
“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 an op-ed published by the Wall Street Journal.
She added: “On Wednesday, with more than 25 other representatives of New York’s securities industry, I sent a letter to state legislative leaders cautioning against the unintended consequences of imposing a transfer tax on stock sales. History’s lesson is clear: If you try to squeeze more revenue from financial firms, the business goes elsewhere.”
According to Forbes, the proposal would apply to transfers of stocks, bonds, and derivatives and comes as the state faces a historic budget shortfall, meaning that projected spending is far greater than projected revenues. The shortfall is largely due to mismanagement and out-of-control spending only made worse by an economic downturn brought by the coronavirus pandemic.
Once it became apparent early last year that the state was heading into a fiscal nightmare, Democratic politicians started doing what they do best: asking for a bailout. Now it appears Democratic lawmakers are employing another one of their favorite tactics: imposing taxes.
New York state Sen. Julia Salazar, who sponsored the bill, 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.”
But, according to Reuters, Democratic Gov. Andrew Cuomo’s office is not keen on the idea. When the topic came at a January news conference, state Budget Director Robert Mujica noted that the tax wouldn’t work in a post-pandemic world where people have learned that they can conduct business from anywhere.
“If we increase the tax like that, you mobilize people,” he said, adding that they would “potentially just move [their] transactions and [their] servers to another part of the country where those taxes don’t exist.”
At this point, it’s rather unlikely that the NYSE will move out of the state. But if it did, it would be a part of the mass exodus already taking place among residents. In December, U.S. Census Bureau estimates showed that people were fleeing the state in droves, spelling the state’s inevitable loss of at least one House seat — and maybe two.