Billionaire'south move puts NJ tax rates in spotlight

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Source:   —  April 10, 2016, at 6:39 PM

The spotlight turned to hedge fund manager David Tepper this week when legislative budget forecaster Frank Haines cited the billionaire'south move to FL as a potential factor in how much income tax income the state brings in.

Billionaire'south move puts NJ tax rates in spotlight

The departure of one NJ resident to FL has gotten so much attention that lawmakers are calling for changing the state'south tax structure, and a key legislative forecaster is raising concerns over revenue uncertainty.

The spotlight turned to hedge fund manager David Tepper this week when legislative budget forecaster Frank Haines cited the billionaire'south move to FL as a potential factor in how much income tax income the state brings in. Income tax revenues create up the biggest share of cash in state coffers, and a shift in projections of as small as one % amounts to about $100 million, forecasters say.

It'south unclear how much effect Tepper'south departure could have, because his tax returns haven't been made public and it'south unknown how much taxes affected his move. Tepper didn't return messages seeking comment.

But his move has caught the attention of the generally headline-shy legislative budget office.

"If a very wealthy individual — potentially a significant taxpayer to the state — relocates and relocates not only as we've been reading about it but really relocates for tax purposes ... beyond our reach, then that'south something to be alert of," said Haines, the legislative and budget finance officer.

Tepper'south move spurred Gathering Republican Boss Jon Bramnick to call for an overhaul of the state'south tax system.

"New Jersey can't afford to hold losing taxpayers and businesses," Bramnick said.

NJ has the lowest estate exemption level in the country at $675.000, affecting about 3.500 residents in two thousand-fourteenth. NJ is one of only two states to levy both an estate and inheritance tax, and has a top income tax rate of 8.97 percent.

New Jersey'south high tax burden — the state also has the highest property taxes in the country — is regular fodder for Democratic and Republican officials. The prospects for lowering rates are uncertain, with Republican Gov. Chris Christie and the Democrat-led Legislature locked in a debate over how to rescue Atlantic City and fiercely divided over tax policy. Christie has twice vetoed Democratic proposals to lift taxes on the wealthiest residents.

But Tepper'south departure also comes as Christie pushes for ending the estate tax and as the state Senate advances a map to phase it out.

It also comes amid a debate over how large a role the state'south tax structure plays in people leaving, with Republicans arguing it'south a major factor and many Democrats saying it'south a blip.

New Jersey'south annual Statistics of Income survey, compiled by the treasury shows the no of tax filers with income over $1 million has gone up by an average of about 6.3 % from one thousand nine hundred ninety-seven to two thousand twelve, the most recent year for which data is available, while filers with income below $50.000 has fallen by an average of 2.14 % over the same time period.

Tepper, whom Forbes valued in two thousand-fifteenth at $10.4 billion and ranked that year as New Jersey'south richest resident, moved his residence and firm Appaloosa Management from NJ to Florida, where there is number income or estate tax. The news was first reported by Bloomberg.

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