New Jersey's Wall Street Tax Plan Will Backfire
Estimates of the amount of revenue the state hopes to raise are probably too optimistic.
Governor Phil Murphy may raise taxes on some Wall Street operations.
Source: Bloomberg
New Jersey is worried about its expanding budget deficit and is contemplating a tax on financial transactions to help close the gap. Although financial transactions taxes are a sort of “microtax” on the value of any stock, bond or derivative traded in the capital markets and don’t directly impact the wallets of consumers, they add up very quickly.
How fast? The New York Stock Exchange is already testing its backup trading facility in Chicago in preparation for a possible move out of New Jersey. Nasdaq Inc. will temporarily move its PSX exchange to Chicago the week of Oct. 26. Other exchange operators will probably move as well or else they won’t be able to compete. As a former Wall Street banker, you would think that Governor Phil Murphy, a Democrat, would understand the issues. But this has more to do with political ideology than common sense. The general idea of a financial transactions tax is one of the sillier ones to come out of any state government in a while.