New Jersey may be facing a budget shortfall because David Tepper packed his bags and move to Florida. Tepper is a hedge fund entrepreneur and he was the richest person in New Jersey.
The state’s tax collections will be more than $160 million short of Governor Chris Christie’s expectations.This may be due to Tepper moving south.
Frank Haines, the legislative budget and finance officer of the non-partisan Office of Legislative Services, said the state may be facing an unusual degree of income tax forecast risk, if it was true that Tepper has shifted personal and business domicile to another state.
NJ’s state budget projections rely on income taxes for 40 percent of revenue. In order to support this, NJ has the third highest tax burden in the U.S. The state has a marginal income tax rate of almost 9 percent for top earners and an array of real estate taxes.
However, Florida has low tax burdens. The state doesn’t tax personal income and it doesn’t tax investments. Florida’s corporate tax is also just 5.5 percent. Florida’s tax burden may be one of the reasons why Tepper made the move.
In December, Tepper filed to move his tax residency to Florida and in Janurary he moved his headquarters to Miami.
However, Tepper isn’t the only billionaire who moved from the Northeast to Florida. Other hedge-fund titans who have made the move include Eddie Lampert and Leon Cooperman. Florida is now how to more than 40 hedge funds.
