The stock transfer tax: a sales tax, if you like, on buying shares of stock in the stock market.
That's been on the books in New York state since 1905 when it struck people to be a fair way to
make that part of the economy pay its fair share of the cost of running the government.
Then in 1981, to pander to the wealthy who play the stock market *since most of the rest of us
don't) they "rebated" it. That's what they called it. They continued to to raise it,
to tax people because they didn't have the courage to say "Well, no tax." And what they
have been doing, and they do to this day, is they rebate it. They give people back the money
officially charged as a tax on buying shares of stock. And now I want to talk with you about the
justification and what it means of this craziness of collecting and then not keeping their money.
And let me underscore we're talking about billions of dollars a year. It would transform the state of
New York's financial situation, even if you put only a penny or two or five per share,
which is a trivial amount of money when you think about what's done. And to give you a sense of it,
imagine if we had imposed it over the last couple of months with the craziness in the GameStop
scandal. You know, the crazy shooting up of prices of that company and then the crazy drop. Well,
millions and millions and millions of shares were bought and sold
by speculators trying to make a killing off the price going up or the price going down.
But those are all transactions and had they had to pay a sales tax,
even a small one, the revenue take for the state of New York would have gone a long way to offset
the rest of that horrible speculation, and made a silver lining, if you like, in terms of providing
the people of New York with some benefit. And of course, if you didn't have a stock transfer
tax in New York, you could have it nationally. And let me start with that. One of the argument
arguments made by corporations in the stock field and on Wall Street is, "You can't do that! If you
did that we would move the transfer of stock, the buying and selling, out of New York state. We'd go
across to New Jersey or somewhere else." Well, first of all that's not so easy. That involves
expenses that have to be undertaken to do such a move technologically, and so on. Not so easy. And
it will require legislation etc. So it's a bit of a fake, number one. Number two, it's a risky fake
because how do you know that New Jersey, once you've spent the money and moved it over there,
won't do the same thing? Especially when New York state is showing them what's going on
here, which we would do. Or then, let me generalize it. Maybe a progressive legislator,
AOC for example from New York, could make this a national issue that there should be a sales ta,
a national one, on this. After all in our society we don't tax property in the form of stocks and
bonds. I've talked about this on our program before. We tax income that comes from them,
like we tax the income that comes from a home that we rent out to people. We have to pay an
income tax on the rent. But we also have to pay a property tax on the value of the house.
But it doesn't work like that with stocks. You pay an income tax on the dividends you get but nobody
makes you pay a property tax on the value of your stocks and bonds. That's why it's so strange
if you sell your $100,000 house and you buy a hundred thousand dollars worth of stock you have
to pay property tax in your town for the house but once you've sold it for the stock you don't
pay property tax to anybody. This is a benefit that rich people, who have enough money to have a
significant amount of stocks, have been benefiting from for decades. Long overdue to give them, for
example, a stock transfer tax, from which they've also been exempted. It's an outrageous indignity.
And then there's the last argument, "You can't do that because companies or stock markets will leave
the United States!" I love this argument. They'll leave the United States. Will they? They might.
But the notion that we are powerless to prevent that or to punish it if some would like to do it
is wrong. Of course we can. Imagine a stock market that left the United States with a president
and a government that said, "Excuse me, you're staying and you're paying the tax.
But if you wish to avoid the tax that you should have been paying for a century anyway, by running
away, fine. We will then not do business with you. You will not be able to come to our country
to make the kind of money you need to make to make any stock market in the world work. We will do it
by jawboning from the president, we will do it by organizing boycotts, you are not going to punish
the future in the way you have evaded taxes in the past. That system is over." Imagine a president,
or a political party, or a movement making a commitment to do that,
saying that the people have the power to make taxes paid by those who should never have been
exempted from them. And the stock game players on Wall Street are a prime, appropriate target. They
have ripped off the rest of this society for long enough. There is no reason to enable or allow them
to do it. And nothing exemplifies this better than the craziness of New York state having in effect
a stock transfer tax, a sales tax on shares, in the law since 1905 that is "rebated" since 1981
so that the richest amongst us don't have to pay. Extraordinary. But it is the kind of extraordinary
bias built into the tax structure of this society. And you can tell by who benefits
from this odd tax structure who has the power to shape that structure so it works that way.