As New York State’s tax on the wealthy looms, a new wave of local tycoons and safe-haven funds are beginning to move or expand their businesses elsewhere in the U.S. The most popular destination is Florida, which does not levy an income tax.
Bloomberg reports that several of the highest-paid executives at $42 billion Elliott Management have left Manhattan, including head of advocacy investments Cohen and co-investment chief Pollack, who have relocated to a new headquarters near West Palm Beach, Fla. Noonan said, “High-net-worth taxpayers are indeed moving out of New York in unprecedented numbers.”
The state of New York was having an increasingly difficult time keeping some of the wealthy and their risk-averse funds even before taxes on them were raised. New Yorkers began moving to Florida decades ago, and the Republican implementation of tax reform in 2018 capped deductions for state and local taxes at $10,000, making it difficult for the wealthy to save on taxes and thus making places like Florida and Texas, which don’t tax income, even more attractive.
To determine whether New York is beginning to lose its aura as a global financial center, watch the changes in the investment industry. Advisors who put together M&A deals and big names may still end up having to meet with clients face-to-face, but risk-averse fund managers should be able to operate just as easily, at least in theory, from their Palm Beach, Florida mansions as they do from their Manhattan skyscrapers.
However, Grant Thornton partner Winter said, the larger hedge funds to move away from New York, may be more difficult to say go, in addition, some of the wealthy people who moved south during the epidemic, in fact, spring has moved back to New York; they may also find it is not easy to stay away from New York.
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