(Bloomberg) -- The financial-services industry stepped up its battle against a proposed tax on high-speed trading in New Jersey, calling the idea bad for individual investors.
The tax would hurt pension funds and people who invest in financial markets for savings, according to letters from more than two dozen industry trade groups including the Securities Industry and Financial Markets Association and the Financial Services Institute. The plan “would effectively represent a sales tax on investors,” the groups said in the letters to lawmakers.
The trade groups, which say they collectively represent 200,000 workers in the industry, said the tax could result in a revenue decline for the state. Firms would be more likely to turn to alternate trading platforms or leave the state if the measure is enacted, they said.
Read more: Trading powerhouses join exchanges in fighting N.J. tax plan
Powerhouses of finance including stock exchanges and major market-makers have joined to oppose the measure. The New York Stock Exchange and firms including Nasdaq Inc., Citadel Securities and Virtu Financial Inc. already threatened to leave New Jersey. Nasdaq plans to temporarily move some operations to Chicago this month as a dry run in case it decides to relocate permanently.
The tax on stocks, options, futures and swaps trading would go into effect for the 2022 budget year if approved, and could drum up $10 billion for the state. Governor Phil Murphy favors using the revenue to expand his social-justice agenda and shore up the state's fiscal health, senior administration officials have said.
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