NJ Financial Transaction Tax (FTT)
Summary
SIFMA Statement before the Assembly Financial Institutions and Insurance Committee hearing on A.4402, a bill that would impose a financial transaction tax (FTT) on entities that process financial transactions through electronic infrastructure located in New Jersey.
Excerpt
STATEMENT OF THE
SECURITIES INDUSTRY AND FINANCIAL MARKETS ASSOCIATION
BEFORE THE
ASSEMBLY FINANCIAL INSTITUTIONS AND INSURANCE COMMITTEE
HEARING ON
A.4402 FINANCIAL TRANSACTIONS TAX
MONDAY, OCTOBER 19, 2020
On behalf of the Securities Industry and Financial Markets Association (SIFMA), 1 we thank you for the opportunity to provide testimony on A.4402, a bill that would impose a financial transaction tax (FTT) on entities that process financial transactions through electronic infrastructure located in New Jersey. SIFMA brings together the shared interests of hundreds of securities firms, banks and asset managers located throughout New Jersey and across the country. There are nearly 80,000 New Jersey residents who are employed by the securities industry, with approximately 38,000 of the jobs located within the state.2 There are approximately 200,000 people employed in the greater financial services and insurance industry in the state– or about 5% of the total employment in New Jersey.3 Our mission is to support a strong financial services industry, investor opportunity, capital formation, job creation, and economic growth. This mission is consistent with the goals of the Governor’s Stronger and Fairer NJ Economic Report which focused on making New Jersey the State of Innovation and supporting key growth sectors, including information, high tech, finance and insurance. FTT proposals send the wrong signal to the financial services industry with a significant presence here and to firms considering re-locating to New Jersey given the proximity to New York.
The proposed FTT in A.4402 is effectively a tax on public pensions, charitable foundations, and university endowments which runs counter to many longstanding policies that promote savings and economic growth, including the recently enacted New Jersey Secure Choice retirement program.
Recently, 26 trade associations representing businesses and financial services sent a joint letter to Chairman McKeon and Senate President Sweeney in opposition to the proposed financial transaction tax in A.4402 and its companion. The joint trades letter raised concerns that the FTT would have negative effects on New Jersey residents’ savings, negative economic impacts on the state itself, cause firms to use alternative, out-of-state trading platforms, and offered examples of unsuccessful experiments with FTT’s in Europe.
1 SIFMA is the leading trade association for broker-dealers, investment banks and asset managers operating in the U.S. and global capital markets. On behalf of our industry’s nearly 1 million employees, we advocate for legislation, regulation and business policy, affecting retail and institutional investors, equity and fixed income markets and related products and services. We serve as an industry coordinating body to promote fair and orderly markets, informed regulatory compliance, and efficient market operations and resiliency. We also provide a forum for industry policy and professional development. SIFMA, with offices in New York and Washington, D.C., is the U.S. regional member of the Global Financial Markets Association (GFMA). For more information, visit http://www.sifma.org.