TAX! TAX! TAX!
CUT! CUT! CUT!
Lotsa talk about increase, nothing about fiscal responsibility. SHAME!!
Posted on 04/20/2003 5:48:05 AM PDT by NativeNewYorker
As state legislators plot to boost income or sales taxes on New Yorkers, others are trying to sell shares in another, lesser-known alternative: the stock transfer tax.
Even if enacted at half the rate it was when the state phased it out in 1981, it could raise a whopping $3.8 billion - most from people outside New York.
That's enough to close the city's budget gap overnight, with some left over for Albany, just by adding a tiny tax - about 5/100ths of a cent, on average - to every single share of stock sold on the New York Stock Exchange.
"It certainly seems like a great idea," said Alex Marshall, who has studied the tax for the nonpartisan Regional Plan Association. "You could raise a lot money from it very easily without hurting people or companies."
Wall Street disagrees.
In a strongly worded letter last week to Gov. Pataki and legislative leaders, the heads of 14 of the city's biggest brokerage firms moved to quash any discussion of the "disastrous" tax.
And they suggested - just as business leaders did in 1909 when the tax was first imposed - that passage of the tax might cause them to flee New York altogether.
"We firmly believe these proposals would add significant disincentives to operate in New York," wrote the executives.
Potential job killer
Opponents argue the relatively recent arrival of online trading networks would allow brokers to execute trades in cyberspace - skipping the tax while killing jobs.
Mayor Bloomberg, a former trader who made his fortune by providing electronic information to Wall Street, seems to be on their side.
"All it requires is a brokerage firm to throw one switch and the transaction takes place in London, or in a computer in New Jersey, rather than here, and we can't tax it," Bloomberg said.
But others who have studied the tax disagree, in part because it would be so small and spread across so many trades a day on the The Big Board.
The main proposal now under discussion suggests a graduated rate. Shares would be taxed from a low of 6/10ths of a penny for each share under $5 to a high of 2.5 cents for each share over $20.
So someone buying 10 shares of stock at $30 per share would pay 25 cents.
The levy on bigger trades would be capped at $175. Given that a billion or so shares trade hands every day on the NYSE, the average levy would be about 5/100th of a cent per share.
Other nations do it
Advocates note that most other exchanges around the world already have hefty transfer taxes in place. London's tax, for instance, is set at .5% - or 10 times higher than the .05% being pushed here.
Some stock sales could migrate to electronic trading networks. About 3% of the market unfolds in these virtual exchanges every day.
But because volume is so low in cyber-networks compared with the NYSE - one analyst compared it to the difference between a corner bodega and a Costco - stock prices also are almost always higher.
So before anyone flees from the NYSE, they would have to make a decision: pay the tax or risk paying more for their stocks in the land of virtual trading.
"Every tax can be avoided," said Josh Mason, policy coordinator for the Working Families Party, the main backer of the transfer tax. "The question is, is avoidance the better, cheaper option than just complying with the tax?"
Many believe the answer is no, especially if the tax is instituted for a limited period as the city and state struggle to fill yawning budget gaps.
In the end, it may be the only idea left to rescue the city.
Bloomberg's first choice, a commuter tax, seems dead on arrival. Property taxes already have been boosted in the city. And with Albany mulling increases in the state's income or sales tax or both, those options seem increasingly closed off to the city.
"Homeowners, students, cops, teachers, subway riders, seniors and firefighters are already doing their share," argued Dan Cantor, head of the Working Families Party. "It's not unreasonable for big-time Wall Street investors and firms to chip in, too."
Originally published on April 20, 2003
But this allows them to bang the CLASS WARFARE drum.
Happy Easter.
Then the bubble burst...
Suddenly, the hue & cry is raised ( at city, county, and state level ) "Hey, we need more money from you taxpayers! You aren't forking enough over to pay for all our 'needs!'"
And of course the Spectre of Slashing Vital Services is trotted out to spook the citizens into handing over more money- you know, police, fire departments, schools-- the whole old worn-out "for the sake of The Children" shibboleth.
They never seem to consider what any business of family would, however-- just spend less money...
Were any such tax implemented, those funds would be wasted too, and then when the next downturn arrived, the cycle of looking for a new source of lucre would start up.
Taxation without representation. Didn't we settle this issue back around 1776?
This always pisses me off!!!! Pass it on to the commuter, who already pays NY and NYC income taxes, who gets very little services from his taxes and NYC, who doesn't educate his kids in NYC schools, etc.
Just a way to subsidize the tax-and-spend liberals, and to pay for all the human welfare scum sponging off the workers.
Screw the bastards, screw them all. In any event, I predict in the future some terrorist will explode a dirty bomb in NYC, and everybody will be forced to vacate in any event.
At least Michael is right about one thing.
TAX! TAX! TAX!
CUT! CUT! CUT!
Lotsa talk about increase, nothing about fiscal responsibility. SHAME!!
"It certainly seems like a great idea," said Alex Marshall, who has studied the tax for the nonpartisan Regional Plan Association. "You could raise a lot money from it very easily without hurting people or companies."
Oh, boy. Where does one begin in responding to such a statement? How about -- Alex, you're a goddam idiot. Alex, taxation of this nature is pretty much a zero-sum game. Let me make it very simple, to accommodate your simple mind. If one party (in this case, New York) gets a big bagful of cash, Alex, that cash came from somewhere. It didn't materialize out of thin air. Immediately, I suppose, it would come from the brokerage houses, but ultimately, it would come from the investors. And inevitably, my confused little Alex, more money will be extracted from the investors than will be delivered to the New York Treasury, because you will have, of course, created another bureaucracy to feed.
But the real problem here is the absolute inevitability of incrementalism. Once that camel's nose gets under the tent, what do you think the odds are that the rate will start creeping up? I'd say about 100%. Federal income tax was implemented as a "temporary" measure, at something like 2%. My, how we've persisted, and my, how we've grown.
In 1994, Marshall studied European city and suburban development as a German-Marshall Fund Fellow. He holds a master's degree in Journalism from Columbia University in New York, and a bachelor's in Political Economy and Spanish from Carnegie-Mellon University in Pittsburgh. He resides in New York City, where he is senior editor at Regional Plan Association and at the Institute for Urban Design. He has spoken around the United States and in Europe.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.