By Olivia Scheck
DNAinfo Reporter/Producer
MANHATTAN — Mayor Michael Bloomberg spoke out Thursday against a proposal that would close tax loopholes for hedge fund managers who work in New York but live out of state.
Bloomberg argued that the move, which had been embraced by Gov. David Paterson and state Democrats, would drive the businesses out of New York, noting that Connecticut Gov. Jodi Rell was already attempting to woo hedge fund managers to her state.
“She’s doing what she should do. And we should be out there doing the same thing — making this a more attractive place to do business," the mayor said in a press conference, available through NY1. "There’s some things the city can do and we’re doing those, I think. The state is not doing its job."
Rell invited several hedge fund managers to a dinner in Connecticut, where she attempted to convince them to move their businesses out of the city, according to the New York Post.
Under current law, New York only taxes hedge fund managers' base salaries if they live out of state, leaving performance-based bonuses untouched. The proposed law would make that money fair game, yielding an estimated $50 million per year for the cash-strapped Empire State.
But opponents of the measure point out that the performance incentive money is already taxed by the hedge fund managers' home states, claiming that the fear of double taxation would drive out more tax money than the tax brought in.
Paterson appeared to be backing off of the proposal, which would tax "performance incentive" money, after the mayor criticized it last month, Reuters reported. But the idea will not be officially off the table until the state Legislature finalizes the budget.
