Tuesday, 3 May 2016
Last updated 10 hours ago
Dec 17 2008 | 1:51am ET
Facing a huge budget shortfall, the governor of New York is proposing a new tax on hedge fund managers.
Under the budget laid out by Gov. David Paterson yesterday, New York would expand nonresident income taxes to included hedge fund management fees. The measure, if passed, is expected to net the state $60 million.
Hedge fund managers living and working in the Empire State may also be hit by limitations on deductions for those earning more than $1 million, and a potential tax hike on the wealthy.
New York, which has been hit especially hard by the economic crisis—Paterson estimates that the state could lose 225,000 jobs—faces a $15.4 billion deficit over the next 15 months. The governor says the state could save more than $1 billion if the budget is adopted by March 1, a month earlier than the deadline, which New York has difficulty doing anyway: The state’s budget has only been passed on time twice in the past 20 years.
Paterson has proposed closing the budget gap with $7.2 billion in budget cuts and $4.1 billion in new or increased taxes and fees, including an 18% tax on sugary sodas and juice drinks.
Paterson took the state’s helm from former hedge fund bête noir Eliot Spitzer, who resigned as a result of a prostitution scandal in January.