Could a stock transfer tax help NYC weather the Trump administration?

Two state lawmakers think taxing the stock market could plug future holes in the state budget and help fund major policy initiatives. State Sen. James Sanders and Assembly Member Phil Steck are reviving a push to reinstate a five-cent tax on stock trades that take place in New York. The bill is projected to bring in $14 to $16 billion annually, and Sanders and Steck view it as a possible defense as the federal budget is expected to slash funding for expensive state-run programs like Medicaid. 

Taxing stock trades isn’t new in New York. A five-cent levy on sales of stock worth more than $20 was in place from 1905 to 1981, when lawmakers eliminated it. Legislative proposals to bring it back have cropped up in recent years. In 2021, state Sen. Julia Salazar and former Assembly Member Yuh-Line Niou attempted to reinstate the tax, but pushback from former Gov. Andrew Cuomo and the financial sector prevented any progress.

Five years later, lawmakers making a renewed push for a stock tax face Gov. Kathy Hochul’s commitment to keep taxes flat. Her office told City & State that she would review the legislation if and when it passed the Legislature. The New York Stock Exchange did not respond to requests for comment. 

Recognizing the uphill battle to get the bill passed one day, Steck said it would take a wide base of support and financial peril to see any progress. 

“To pass this bill would require a movement, and I think unfortunately, would probably require dealing with a lot of federal cuts that are important,” Steck told City & State. “The governor is just too corporate-oriented to support this, and the speaker is afraid Wall Street will leave New York City.”

Steck and Sanders held a rally Wednesday near the New York Stock Exchange with faith leaders, education advocates, economic experts and environmentalists. Sanders said it was essential to protect New York from the Trump administration’s potential funding cuts. 

“I think that we have a secret weapon for support in Albany. I think that we have an orange guy down in DC who is determined to make sure that New York does not have enough money to carry on the business of New York,” he said. “So I think that once we realize that he is kind enough to devastate us, we need to move in an affirmative fashion, and we need to make sure that our police are paid, that the fire department is paid, that the roads are paved and that education takes place.”.