The New York Stock Transfer Tax: Re-instate Or Not?
The New York Stock Transfer Tax is still in operation, although currently the proceeds of the tax are automatically rebated to the buyer of the stock. However, the perennial question of whether this tax should be brought back and in what scale it should be re-implemented lies in the fact that it is a profitable tax and payment of the tax rests solely on the buyers of stocks, not the brokerage houses. This is how it originally worked; back then, the stock buyer was charged on a sliding scale. That is, the amount of New York Stock Transfer Tax you paid depended entirely on the number of shares you purchased. This cost could rise up to 5 cents per share, to a maximum of $350 per transaction. This basically means, that regardless of which part of the world you live in, as long as you buy stocks that are listed in the New York City Stock Exchange, you are liable for these taxes. Prestigious stock exchange houses such as France, Germany, Switzerland, Hong Kong, and even Singapore, charge stock transfer taxes. It has even been calculated that in comparison with these exchange houses, the stock transfer tax that the state of New York imposed is low. The premise behind the continuing proposal to re-instate the New York Stock Transfer tax is that the low rates ensures it isn't a problem to pay, while the volume of stocks bought and traded in New York on a daily basis are in millions. With all that it has going, the question now becomes, why then has it not be reinstated? The position of New York brokerage houses is that the business of business of trading and selling stocks is increasingly becoming cut throat. For these brokerage houses, if staying in the city of New York has a competitive advantage to be maintained, in this case, not re-instate the New York stock transfer tax, then it should remain in place. Additionally, the New York City government fully recognizes that if these brokerages and investors decide to move or stop buying stocks, then there would be a significant loss of business revenues, and a dearth of employment opportunities for the city. Consider the fact that the securities industry is one of the biggest employers in New York City, for each job on Wall Street support as much as two services jobs. The possibility then of these of brokerage houses and investors leaving, is not a viable option for the city to risk. If the tax is to be implemented, then Wall Street directly benefit from the proceeds. A city media campaign to promote the New York Stock Exchange center, or a new stock exchange building, perhaps? This tax proposal should be carefully considered with all the affected parties, consulted. Then the tax proceeds will rebound to benefit of the city and the people it is meant to serve.
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