While a financial transactions tax has existed in New York state for more than a century, nearly $350 billion raised through the levy has been rebated back to Wall Street over the past four decades. A new poll conducted by Zogby Strategies shows that a majority of New Yorkers want to stop sending revenue back to speculators and once again collect the stock transfer tax according to state law—and use the funds to invest in green energy and infrastructure jobs.
"When asked if the stock transfer tax can provide billions for investment in jobs, notably for infrastructure and green energy, 63% are more likely to support the collection."
—John Zogby, pollster
The stock transfer tax has been on the Empire State's books "since a Republican governor introduced it in 1905—and still is," a team of researchers at the Tax Justice Network explained in a paper published last month.
"The tax was progressive and highly effective, raising around $80 billion (in 2020 dollars) until 1979 when the New York mayor and state governor caved into Wall Street pressure and phased in a 100% annual 'rebate,' which unfortunately also remains in effect," the paper continues. "So the tax is in effect levied—then kicked straight back to Wall Street."
As pollster John Zogby wrote Sunday in Forbes, "Most New Yorkers are not even aware of this issue." However, a coalition of public interest groups, unions, and lawmakers in Albany recently commissioned a poll "to test support or opposition of breathing new life into this phantom tax."
According to Zogby's survey of 704 likely voters statewide, 53% agreed the stock transfer tax should be collected while just 34% disagreed. Zogby wrote that "after arguments both in support and opposition were read to voters, agreement rose to 59% while opposition declined to 30%—a 29-point differential."
"When asked if the stock transfer tax can provide billions for investment in jobs, notably for infrastructure and green energy, 63% are more likely to support the collection while only 18% are less likely," Zogby noted. "The most persuasive argument was additional billions for investment—58% of those who initially 'somewhat disagreed' with the tax moved into the support column."
According to Zogby:
Initial support for the stock transfer tax came from Democrats (63%) and independents (49%), while 44% of Republicans were in favor. After hearing all the arguments pro and con, support on balance increased among all groups: Democrats (70%), independents (58%), and Republicans (45%). Except for suburban Republicans, a majority of all races, voters under 50 years of age, both upstate and New York City residents, and even those working in the financial services industry (77%) all supported collecting the tax.
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Significantly, the argument that was most likely to move those who initially opposed reinstatement of the tax to support was the additional revenue generated for new infrastructure and green energy (58% more likely to support it).
New York State Assembly Rep. Phil Steck (D-113), who told researchers at the Tax Justice Network that "the whole public sector has been starved," has introduced a bill to remove the rebate, which would make it possible to redistribute billions of dollars in revenue each year rather than taxing financial transactions and then reimbursing stock traders. State Sen. James B. Sanders (D-10), chair of the State Senate Committee on Banks, is sponsoring companion legislation in the upper chamber.
The authors of the paper wrote that Steck has introduced "a disarmingly simple three-page bill that would raise some $10-20 billion a year from Wall Street and plough the money into the pandemic response and the local economy, creating jobs with a fair, efficient, and progressive tax."
Steck's bill currently has 56 sponsors in the New York State Assembly and 13 in the Senate. In light of the new Zogby poll showing that a majority of New Yorkers support reactivating the stock transfer tax—as the state legislature is now considering—Tax Justice Network on Sunday resubmitted their analysis to lawmakers in Albany.
James Henry, an economist, lawyer, and one of the paper's co-authors, on Monday noted that "the New York State legislature is meeting Tuesday to decide what its revenue options are and Wall Street is really digging in especially because Gov. Andrew Cuomo is imperiled. They have systematically understated the Wall Street revenues that this tax would produce."
In an interview last year, Henry told Salon that "New York has a chance to set an example for the world and that is a very painless tax that is highly concentrated on very, very wealthy people and institutions that can be used for many ongoing needs."
"If the feds adopt a national financial transaction tax before New York State does, then all the money would flow into the federal treasury," Henry said Monday. "So there's really no good argument for not doing this except that Wall Street is very nervous about this escalating into the first successful progressive tax reform in 50 years."
As Richard Wolff, professor emeritus of economics at the University of Massachusetts, Amherst, said last year: "At no other time in recent history would there be less of a basis for opposition to a stock transfer tax when the mass of the population, so-called Main Street, is in such deep economic difficulty with very little prospect of getting out of it soon and a major likelihood it is about to get worse."