Nybot lobbies against proposed futures transaction tax

The New York Board of Trade (Nybot) has sent a letter to the US Congress detailing its opposition to the Bush administration’s fiscal year 2003 budget proposal seeking a new tax to be levied on each commodity futures and options contract traded on a regulated US exchange.

The tax could raise $33 million to help fund the Commodity Futures Trading Commission. But Nybot said it is lobbying members of Congress to reject the notion on the grounds that the tax would increase the cost of conducting business on US exchanges, which would harm participants and the markets. Nybot said the transaction tax would unnecessarily and unfairly place US exchanges at a competitive disadvantage to foreign exchanges.

Nybot added that the tax would cripple its efforts to recover from the September 11 terrorist attacks that completely destroyed its offices in the World Trade Center.

The controversial idea of a so-called user fee on commodity futures and options contracts traded on US futures exchanges was proposed several times in the 1990s by the Clinton administration, although it was never implemented by Congress.