How a Billionaire's Move to Florida Could Screw NJ

The loss of David Tepper's taxes is horrible news for the Garden State
By Michael Harthorne,  Newser Staff
Posted Apr 7, 2016 4:54 PM CDT
How a Billionaire's Move to Florida Could Screw NJ
Billionaire hedge-fund manager David Tepper's move from New Jersey to Florida could have major budget impacts on the Garden State.   (AP Photo/Mel Evans, File)

New Jersey, already struggling with its budget, could face a massive shortfall next year—all because one guy chose to move to Florida, Bloomberg reports. In fairness, that guy was the wealthiest man in the state. Hedge-fund manager David Tepper has an estimated worth of $10.6 billion, and after decades in New Jersey he's officially moved his residence and business operations to the Sunshine State. According to CNBC, people close to Tepper say he wanted to be closer to his mother and sister in Florida. But it also points out he stands to save hundreds of millions of dollars in taxes by moving south. Thanks to New Jersey's 8.97% tax burden on its highest earners, Tepper likely paid nine figures in taxes—potentially more than $500 million—over the past three years.

Unlike Tepper's old home, which had the third highest tax burden in the country, Florida has one of the lowest, the Christian Science Monitor reports. It has no personal-income or estate taxes. But Tepper's gain is New Jersey's loss. “We may be facing an unusual degree of income-tax forecast risk," New Jersey's budget and finance officer says regarding Tepper's move. The state gets about 40% of its revenue from personal-income taxes—a large chunk of which comes from the incredibly wealthy. Being off by even 1% in income-tax forecasts could mean a budget shortfall of $140 million. But all is not lost for the Garden State. Its population of tax-paying millionaires is continuing to rise, and it boasted the fourth highest number of millionaires in the country in 2015. (This house is available for those who want to move to New Jersey, but it comes with a stalker.)

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