A few weeks ago, David Applefield and I wrote an op-ed in NJ.Com calling for a micro-cent tax on stock transactions. The Micro-Cent Tax Given that more than 10 billion shares a day are traded through servers housed in New Jersey, we projected that such a tax would raise more than $8 billion per year for New Jersey. This would be far better than Governor Murphy’s plan to add yet more to New Jersey’s outstanding pre-COVID debt of $190 billion which is largely attributable to post-employment healthcare and pension obligations to public sector retirees.
We heard responses to our proposal that we were not seeing the obvious result of a New Jersey stock transaction tax: the NY Stock Exchange and NASDAQ would simply move to a different state and New Jersey would lose yet another business enterprise. It’s a legitimate point but we laid out the answer: do not to abandon the idea but rather expand it. Let’s look at where we are now, which is worse than where we were in mid-June when our op-ed was first published.
First, the pandemic is getting worse, our fiscal condition is a disaster and President Trump and Senate Republicans are not going to help “blue” states. We need to help ourselves.
Second, we need to enlist allies who are similarly affected. We need to share this revenue with New York, and, if they are willing, Connecticut and Massachusetts — states which have traditionally been “net giver” states to the Federal Treasury.
Third, if Joe Biden gets elected, Elizabeth Warren is going to advocate a national tax on stock transfers. Her proposal raises $80 billion per year, far more than we are proposing.
Fourth, if we raise the tax from ¼ cent to ¾ cent per share, there is enough tax revenue to share among these four states and still impose a tax that is far lower than what Senator Warren will propose.
Fifth, if our proposed state-level tax is imposed before Senator Warren can get her national tax adopted, there will be 53 Congressmen and eight Democratic Senators who would oppose it in order to protect their constituents and themselves in their home states. And, once the state-level tax is adopted, NYSE and NASDAQ could still move but doing so would eliminate any incentive for these Congressmen and Senators to oppose Senator Warren’s national tax. The…