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SIFMA today issued the following statement from SIFMA president and CEO Kenneth E. Bentsen, Jr. on the New Jersey S2902/A4402 proposal, in conjunction with SIFMA testimony given today at the hearing before the New Jersey Assembly Committee on Financial Institutions and Insurance:
“SIFMA strongly opposes the imposition of a financial transaction tax (FTT) due to the cost to retirement savers, investors, businesses and the economy. An FTT is nothing more than a sales tax on investors and it runs counter to many longstanding policies promoting savings and economic growth. Moreover, in jurisdictions where an FTT has been implemented, it has never raised the expected revenue, yet it has resulted in a migration of trading volume to other jurisdictions which have not imposed an FTT, which is a predictable result in today’s predominantly electronic and globally connected markets.
“With specific regard to the New Jersey S2902/A4402 proposal, SIFMA would note that securities firms must adhere to FINRA’s ‘best execution’ rule which requires broker-dealers to find the most favorable price for customers when buying and selling securities. Faced with an FTT, these firms are likely to gravitate towards alternate trading platforms in other states to offer a better price for their clients. As such, the imposition of an FTT will likely lead to financial exchanges and firms moving their electronic infrastructure and the related jobs outside of New Jersey, creating a negative fiscal and economic impact across the state. Not only does the sector employ more than 38,000 workers in New Jersey, its indirect and induced contributions support an additional 55,000 New Jersey workers. Moreover, the sector contributes nearly $1.4 billion in New Jersey state and local taxes. We believe the proposal is far more likely to harm New Jersey investors and its overall economy than to achieve its revenue forecasts.”
