On Friday June 23, Governor Paterson’s press secretary confirmed via email that New York’s controversial proposal for an extra tax on hedge fund managers that do business in New York but live elsewhere has officially been taken off the table.
In an email, press secretary Morgan Hook wrote:
“The Governor re-submitted a revenue bill that does not contain the hedge fund tax, and he would prefer the legislature pass his version of the revenue bill.”
To follow up on yesterday’s post (N.Y. Hedge Fund Tax May Fall by the Wayside), FINalternatives reported today that in reply to a letter from Connecticut Governor Jodi Rell welcoming New York’s hedge fund industry to move to Connecticut if New York decides to tax as ordinary income “carried interest” payments made to hedge fund managers with offices in New York, but who live out of state , the New York Hedge Fund Roundtable responded with a cautious “thanks, but no thanks.”
Timothy Selby, president of the Roundtable, wrote to Rell:
Your letter was well-received and we hope that [New York] Gov. [David] Paterson’s recent statements backing away from the tax proposal prove true.
We applaud Connecticut for appreciating the value of the hedge fund industry and for pursuing economic policies that promote its growth. We only hope, however, that lawmakers in Albany reach the same conclusion.
In his letter Selby also voiced a clear preference for hedge fund managers to keep their offices in New York:
New York is the financial capital of the world and is home to more hedge fund managers and industry professionals than any other state. This is no accident, as New York offers access to markets, investors and human resources that are unmatched anywhere else.