One man could cause a budget crisis in New Jersey — by moving out of the state.
Billionaire David Tepper has moved from New Jersey to Florida, and the loss of his income tax could leave a $140 million hole.
The 58-year-old founder of the hedge fund Appaloosa Management — who Forbes estimates is worth $11.4 billion — registered to vote in Florida in October, listing a Miami Beach condo as his permanent address, and he filed a court document in December declaring himself a resident of the tax-friendly state.
He also opened a branch of Appaloosa in South Beach, though the headquarters will remain in Short Hills, NJ.
The move could leave a devastating deficit in New Jersey’s income-tax revenue, Bloomberg News reported.
Forty percent of the state’s revenue comes from personal-income tax — a third of which is collected from less than 1 percent of taxpayers. Tepper was New Jersey’s wealthiest resident.
“We may be facing an unusual degree of income-tax forecast risk,” Frank Haines, the budget and finance officer at the state Office of Legislative Services, told a Senate committee in Trenton Tuesday.
He added that even just a 1 percent deduction in income-tax revenue could create a $140 million gap in the state’s budget.
New Jersey has the country’s third-highest tax burden, according to the Tax Foundation in Washington. Residents pay not just the nation’s highest property taxes, but are also subject to both an estate tax on the deceased and an inheritance tax on their heirs.
The only other state to subject residents to both an estate and inheritance tax is Maryland.
Florida is free of both personal income and estate taxes.
New Jersey’s wealthiest residents pay an income-tax rate of 8.97 percent. State Democrats have pushed for a millionaires’ tax to increase the rate to 10.75 percent, which Republican Gov. Chris Christie has vetoed repeatedly.
Appaloosa’s South Beach office will have no permanent employees and will be used only when Tepper and other employees are in the area, Reuters reported.
Tepper lived in New Jersey for more than two decades, first as a junk-bond trader executive at Goldman Sachs before founding Appaloosa in 1993. He also owns a 11,268-square-foot mansion in Sagaponack, LI.
Source : http://nypost.com/2016/04/10/this-man-could-destroy-new-jersey-by-moving-to-florida/