Hedge fund lobbyists have a blunt message for Connecticut: if you raise taxes, we’ll move.
Right now Connecticut earns billions from taxes on the 200 or so hedge funds that have offices in the state.
And CT Governor Dannel Malloy’s new budget raises taxes by $1.4 billion in the first year and $1.2 billion in the second (to cover a $3.3 billion deficit).
The proposed tax hikes are part of the reason UBS is moving out of Stamford.
Now hedge funds are warning that they’ll do the same.
Bruce McGuire, founder and president of the Connecticut Hedge Fund Association, told the AP:
“There are other parts of the country and other parts of the world that would very much like to have what we have here in Connecticut. The hedge fund industry is very portable. People need to be aware of the fact every time you kick up the personal income tax rate, especially every time you kick it up on higher earners, there is a potential for some of these higher earning hedge fund types to decide to move somewhere where they don’t have income taxes or have a lower rate.”
And instead of listening, apparently Malloy is planning to ask hedge funds to boost hiring.
Malloy is planning a meeting with industry representatives in recognition of their importance to the business sector in lower Fairfield County, spokeswoman Colleen Flanagan said Friday. She said the governor is reaching out to a range of businesses to see what government can do to help boost job creation.
McGuire is quick to remind the state that Shanghai officials, who visited CT recently because they’re trying to build their own Greenwich, aren’t asking for anything, and aren’t threatening higher taxes.