What would the New York Stock Exchange (NYSE) be if it wasn’t in New York anymore? Maybe the Florida Stock Exchange?
Florida Chief Financial Officer Jimmy Patronis thinks that might be a good idea.
Although he didn’t go so far as to call it the Florida Stock Exchange, he did refer to the NYSE simply as “The Exchange” in a letter he wrote today to NYSE President Stacey Cunningham suggesting the NYSE move from the Big Apple to the Sunshine State following a Wall Street Journal op-ed in which she opined leaving New York is a possibility if its lawmakers push forward with a financial transactions tax.
In Cunningham’s op-ed titled “The NYSE isn’t moving – yet,” she wrote, “The New York Stock Exchange belongs in New York. If Albany lawmakers get their way, however, the center of the global financial industry may need to find a new home.”
The NYSE president pointed to the trend of white-collar Wall Street workers relocating to states like Florida, Texas and others “with hospitable tax policies.” She wrote that her exchange could be forced to relocate if a stock transfer tax being considered in New York’s state capital becomes law.
Cunningham wrote, “We’ve proved, by pandemic-driven necessity, that we can close the physical trading floor on a moment’s notice and maintain service without missing a beat. Similarly, the broader financial-services industry shuttered offices and shifted workforces, without hiccups, to remote locations.”
“Some of our customers are already asking about our willingness to relocate,” She said.
As she pointed out Florida has benefitted recently from firms looking to reduce costs by expanding into other cities, particularly in South Florida where major hedge fund managers and financial firms have increased their corporate footprints.
Patronis encouraged Cunningham to go ahead and make the leap, writing, “There is no time like the present to consider moving your business to the Sunshine State.”
He pointed out the tax advantages “The Exchange” would enjoy by moving to Florida. He said, “The Exchange’s parent company, Intercontinental Exchange, Inc., could realize a significant savings on corporate income taxes since Florida’s 4.4 percent corporate income tax rate is nearly one-third lower than the New York Corporate Income Tax rate of 6.5 percent. Crucially for The Exchange, Florida repealed its intangible tax on the market value of stocks, bonds and other financial instruments in 2007. The tax repeal also eliminated intangible taxes on mutual funds, bonds and more.”
He also pointed out the other benefits of living in Florida, including no state income tax, Florida’s many lifestyle benefits, etc.
It’s not just Florida courting the NYSE, either. Texas’ governor has also reached out to Cunninghame and the state legislature has already banned taxation similar to what New York is considering.
Cunningham warned the New York lawmakers, “Financial transaction taxes force trading activity to migrate to more efficient markets. This is neither an empty threat nor mere conjecture.”
“It doesn’t have to be this way,” she said. “The securities industry should stay in the Big Apple where it belongs. But if New York is to remain the financial capital of the world, it needs to avoid the folly of this tax and show that it truly understands how market forces work.”
Taking a little extra dig at New York’s continued pandemic-related economic shutdown, Patronis ended his letter with an invitation, “My door is always open, and given the restaurant closures in New York, I would be more than happy to take you out to eat at one of our fine restaurants to discuss the many reasons to move The Exchange to Florida.”