David Tepper is a hedge fund manager whose company is located in New Jersey. He is also a resident of the Garden State (misnomer alert). He recently announced that he was moving his corporate headquarters and his personal residence to Florida. The NJ state budget director then stated that this move could affect the amount of tax revenues generated by NJ.
For the record, NJ has the highest real estate taxes in the country, a state estate tax rate of 16%, only a $675,000 exemption for estate taxes (lowest/worst in the country), and a top income rate of 9%. Florida has no income tax and no estate tax, no Newark or Camden, but plenty of sunshine. Some NJ legislators wish to revise the state tax code to retain residents like Tepper while others believe his move and others are a “blip” and do not warrant revision of the tax rates.
Three quick points:
- If the state is so dependent on the income of one individual, its tax base is too narrow and should be expanded to include more residents.
- Those NJ politicians who tell NJ residents to “fuhgeddaboudit” the NJ income and estate tax rates because they do not matter to people are delusional.
- Note to Bernie Sanders supporters, you can only tax people so much before they change their behavior to reduce their tax burden.