As we know, the Coronavirus pandemic has led to a financial meltdown around the world, and New York City has been no exception. Now, consider placing a tax on the sale of shares.
The coronavirus crisis is taking a toll on the budgets of New York State, which has seen a fifth of its revenue go up in smoke.
This situation already projects a deficit of $61 billion over the next four years. That is why the more progressive Democrats, who are gaining weight in the current state legislature, have set their sights on buying and selling shares to try to close the tax gap.
Gold price trades at record highs
Tax on the sale of shares
The bill introduced by Democrat Phil Steck advocates a 1.25-cent tax on the sale of a five-dollar stock. In addition, it could be raised to five cents for a value exceeding $20.
The proceeds would then go into New York’s general fund for the next three fiscal years. Subsequently, they would be used to improve infrastructure, with the Metropolitan Transportation Authority taking about 25%.
If approved, this tax would directly affect the top 10% of income. According to a study by New York University professor Edward Wolff, quoted by Bloomberg, they owned 84% of the shares in circulation in 2016.
According to Steck, one of the benefits of the measure is that it would primarily affect residents outside of New York State, who execute their securities purchase and sale transactions there.
However, the financial industry’s opposition to the bill is evident. Wall Street is responsible for 17% of the state’s tax revenues and for generating 181,200 jobs, some of which could be jeopardized if trading volume drops.
Moreover, such a decision could cause the New York Stock Exchange and its parent Etoro company, Atlanta-based Intercontinental Exchanges, to consider moving their operations out of the state. A threat that came as early as 1981, when the New York Stock Exchange managed to annihilate this move, according to theEconomista.
At the time of writing, the Dow Jones is trading at around 26,800 points, down 5.8% so far this year.
Can Bitcoin take advantage of this possible tax?
If that measure succeeds, it may discourage the purchase/sale of shares. In this case, part of that money flow can flow to the cryptosystems, especially to the Bitcoin.
The big advantage of Bitcoin is that no one can impose a tax on you, and you are always in control of your money. In short, you are your own bank.
The goal of today’s reflection is to open your mind and think that in the new world, or the new world order as many people like to say, Bitcoin is going to play a central role.
Finally, what do you think: Will it be possible to implement a tax on the purchase/sale of shares in New York? Let us know your opinion in the comment box.
I’ll say goodbye until tomorrow with this sentence by Warren Buffett:
„You have to be greedy when others are afraid and fearful when others have eyes injected with greed.“