A misguided tax on financial transactions aimed at data processing facilities in New Jersey has caught the eye of Governor Phil Murphy.
That development was followed by the New York Stock Exchange (NYSE) stating they would move operations out of New Jersey in response. Now, a broad coalition, including Nasdaq, Citadel Securities and Virtu Financial, has joined NYSE in promising to move operations out of New Jersey if a financial transactions tax is imposed.
This is incredibly predictable, given that New Jersey is home to computers that process trades, something that can easily be moved elsewhere. Even New York, which is home to trading floors, risks driving off exchanges if it imposes a similar stock transfer tax.
The New Jersey proposal would levy a 0.25 cent tax on a wide variety of financial transactions processed by the exchanges at data centers – like trades of stocks, options, futures.
Don’t let the low per transaction number fool you, with data centers processing tens of thousands of transactions each year, the cost will add up to an estimated $10 billion. And that is just the revenue the state expects, by adding burdensome costs and compliance, the value of every American’s investments and retirement will go down.
The exchanges will prove their point later in September as they use facilities outside of New Jersey to process transactions for one day, showing how easily they can move.
If you thought Bernie Sanders’ or Elizabeth Warren’s tax hike ideas were no longer a threat, think again. This tax, as well as New York’s so-called billionaire asset tax, are straight out of the Sanders and Warren playbook, and absolutely threaten all Americans’ retirement plans.
While New Jersey has been hit hard by COVID-19, revenues are coming back faster and higher than expected. The fact is, Governor Murphy pushes for tax hikes every year, because he refuses to address New Jersey’s out-of-control spending problem – especially huge pension liabilities that even moderate Democrats want to reform.