Recently, New York City Mayor Eric Adams appeared on the podcast Smart Girl Dumb Questions and offered a robust defense of billionaires in New York City, saying, “I don’t want to say to billionaires, we don’t want you here. I know why we need them here: the money we make just on stock transfer taxes and bonuses, which actually impacts our budget.” While the Mayor seems to acknowledge that imposing a tax on stock transfers would generate much-needed revenue not just for New York City, but for the entire State, he is incorrect that it is currently in place.

In 1905, a half-penny tax on all stock trades was enacted in New York because the State needed revenue and sales taxes were preferred to income or property taxes. Despite criticism from The New York Times that the Stock Exchange would move to New Jersey, volume on the exchange not only increased, but all other exchanges without a tax died out. Unfortunately, in 1981, due to Wall Street fever, the tax was eliminated, resulting in New York State losing a minimum of $14 to $16 billion in annual revenue that could have been allocated towards infrastructure, healthcare, and education.

Despite misrepresenting the history of the Stock Transfer Tax, Mayor Adams is correct that reinstating the Stock Transfer Tax would generate much-needed revenue for New York City, including for the MTA and the New York City Housing Authority. He is also correct that the billionaires in New York City would not leave due to the Stock Transfer Tax, which in its more modern version is pegged at 0.1%. 

The Partnership for New York City argues that the Stock Transfer Tax would drive the securities industry out of New York, which has no basis in logic or historical precedent. It would cost more money for the Stock Exchange to move out of New York City than a tiny tax on transactions. This was true when it was enacted in 1905, is still true to this day, and has been true all over the world where stock transfer taxes are imposed.

I hope that after understanding the history of the Stock Transfer Tax, the next Mayor of New York City will urge the Governor and the Legislature to reenact the Stock Transfer Tax. Not only would this generate much-needed revenue for New York City, but also for the entire State of New York.If New Yorkers can pay taxes to Texas, and other oil-producing states and nations, when they buy gasoline, why can’t residents of other states and nations pay taxes when they trade stock in New York?