Connecticut Governor Hedge Fund
Gov. Rell Pushes NY Hedge Funds to CT as Bill Dies
As reported earlier, Connecticut legislators led by Governor Rell are trying to attract hedge funds from New York. New York’s state government is considering raising taxes on hedge funds commuting to New York from out of state. Connecticut Governor Rell recently told hedge fund managers that it would be a “wise choice” to move to Connecticut considering the possible taxes. But Governor Rell may be wasting her time as the New York tax proposal appears dead according to the latest news, “The New York state Senate on Tuesday passed a budget bill that stripped out the tax provision it previously contained.” Although the tax could resurface later, for now hedge funds have been saved from a higher tax–or having to work in Connecticut.
Connecticut Governor M. Jodi Rell said it would be a “wise choice” for hedge-fund managers to move to her constituency and away from New York, as Connecticut’s tax regime is more favorable.
Rell’s admonition came despite New York Governor David Paterson inconspicuously dropping a tax proposal last month that would have treated hedge-fund managers’ performance incentive or carried interest as a capital gain, rather than as ordinary income, and subjected it to tax rates as high as 35%.
In a handout titled “Connecticut: The Wise Choice,” Rell compared the tax regimes for both states, as though the tax proposal were still being considered by the New York legislature.
The effective tax rate for a married Connecticut resident fund manager earning $2 million in management fees and $5 million in carried interest would amount to 17.46% if the person works in New York, she said; the tax rate would be 6.28% if the manager works in Connecticut. Source
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