An Open Letter to Andrew (Cuomo), Phil (Murphy), Ned (Lamont) and Charlie (Baker):
You guys remind me of Charlie Brown playing football with Lucy (a/k/a Mitch McConnell). Every time you run up to kick the ball, she pulls it away. Surprised? You shouldn’t be. Lucy isn’t going to give you money to support your state and local governments and President Biden may have to surrender on this point to get the other Covid relief we all need.
Instead of screaming “Aaaarrrrrrgggggg,” New York, New Jersey, Connecticut and Massachusetts need to pass a financial transaction tax on stock sales that occur in these states with projected annual revenues ($24b) shared 40% (NY), 40% (NJ), 10% (CT) and 10% (MA).
The common wisdom is that the exchanges will threaten to leave the Northeast and relocate if this regional tax is passed. Such a loss would be a huge blow to the region and that is true. But, the common wisdom is wrong. Here’s why.
First, Senator Elizabeth Warren, supported by a Democratic Senate and House majority, will attempt to use the reconciliation process to impose a national financial transaction tax that will be much larger than what David Applefield and I proposed (3/4 of a penny per traded share). So, here’s what I say to Wall Street: pick your poison, and to make it go down a little easier, we can agree in advance that our regional tax will cease to exist if a Federal financial transaction tax is enacted.
Second, the four governors will promise Wall Street to move heaven and earth to get their eight senators and fifty-three Congress-persons to oppose a Federal financial transaction tax. A Federal financial transaction tax is not going to pass if it opposed by a heavily Democratic bloc.
Third, the voters of NY, NJ, CT and MA will cheer your efforts. Here’s the truth that you already know: NY, NJ, CT and MA have routinely paid far more that we ever receive from the Federal Government. As an example, here are the 2019 numbers from the Rockefeller Institute of Government.
As a resident of the state of New Jersey, and having grown up and been educated in the…