Weary of New York’s exorbitant city and state tax rates, a large number of Wall Street hedge funds and private equity firms are making an exodus to Florida’s Palm Beach County, the New York Post reported.
“Florida is a state of choice,” Thalius Hecksher, global development chief for Apex Fund Services, a hedge fund that recently moved a bulk of its operations to Palm Beach, told the Post.“It’s organically grown. There’s no need to drag people down here. It’s a zero-income-tax jurisdiction.”
Though residents of Florida and New York have the same federal tax rates, Florida has no state income tax, while New York’s rate is only second to Alaska. In 2010, state and local governments in New York took 14.7 percent of income, according to the Post’s analysis of state records.
To be sure, the allure of Manhattan is more difficult to resist for new hedge funds, who have been increasingly setting up shop there in order to attract investors. But more established firms are skittish about New York City, especially given the fear of less business-friendly policies in the post-Bloomberg era. “You weigh all of the benefits for being here to those in New York, and they outweigh them every time,” Evan Rapoport, CEO of HedgeCo.net, told the Post. HedgeCo is ramping up its presence in Palm Beach County at the expense of New York City.
Officals in Palm Beach have welcomed them with open arms, recently opening a dedicated office to entice these firms to relocate down south with promises of friendly policies and ample sunshine. “We’re not doing a multimillion-dollar marketing campaign. We don’t need to,” Kelly Smallridge, who heads the Palm Beach County Business Development Board told the Post. “They’re coming to us.” [NYP] –Hiten Samtani