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Goodbye income tax: Why America’s richest move to Florida and save millions

David Tepper (middle) flanked by CMU President Subra Suresh (right) and Tepper School of Business Dean Robert Dammon. Carnegie Mellon University received a $67 million gift from the charitable foundation of CMU alumnus and renowned investor David A. Tepper (TPR'82) to create a major new academic hub that will further strengthen collaboration among CMU's schools and colleges at the Pittsburgh campus. (Photo Credit: Carnegie Mellon University)

David Tepper (middle) flanked by CMU President Subra Suresh (right) and Tepper School of Business Dean Robert Dammon. Carnegie Mellon University received a $67 million gift from the charitable foundation of CMU alumnus and renowned investor David A. Tepper (TPR’82) to create a major new academic hub that will further strengthen collaboration among CMU’s schools and colleges at the Pittsburgh campus. (Photo Credit: Carnegie Mellon University)

Billionaire hedge fund manager David Tepper, 58, is moving south. He won’t be punished for being rich. Tepper relocated and escaped a heavy tax bill in New Jersey so he can enjoy Florida’s sun and income tax ease.

In October 2015, Tepper registered his condo in Miami Beach as his permanent address. By December, he filed paperwork declaring his Florida residency. On New Year’s Day, he chucked up the deuces and relocated his firm, Appaloosa Management, to Florida from New Jersey where he enjoys no personal income and estate taxes.

New Jersey’s state tax office won’t be too thrilled about losing an estimated $140 million in revenue they forecasted they’d collect from Tepper.

“We may be facing an unusual degree of income-tax forecast risk,” Frank Haines, budget and finance officer with the Office of Legislative Services told a Senate committee last week in Trenton, NJ.

New Jersey relies on personal income taxes for about 40 percent of its revenue, and less than 1 percent of taxpayers contribute about a third of those collections, according to the legislative services office. A one percent forecasting error in the income-tax estimate can mean a $140 million gap, Haines explains.

Daily Mail reports:

For decades, Florida has had one of the lowest tax burdens in the country, according to the independent research organization Tax Foundation.

The strength of Florida’s low tax burden comes from its lack of an income tax, making it one of seven such states in the U.S. The state constitution prohibits such a tax, though Floridians still have to pay federal income taxes.

Florida also does not assess an estate tax, or an inheritance tax. No portion of what is willed to an individual goes to the state.

Floridians no longer need to pay taxes to the state on intangible goods, such as investments. The law requiring that tax was repealed in 2007.

Tepper’s estimated net worth is $11.4 billion. The self-made millionaire ranks high on several of Forbes‘ lists. Currently ranking No. 38 on the Forbes’ 400. He also ranks No. 4 as one of the highest earning hedge fund managers. He was educated at bachelor of arts from the University of Pittsburgh and master of business administration from the David A. Tepper School of Business, is married with three children.



6 Comments

  1. Anne on April 12, 2016 at 10:16 am

    It is not “punishment” to pay taxes. It is part of being a member of civil society. Hoarders, pure and simple. What greed. May your water be tainted; your food, poisoned; your roads filled with potholes; and may you have no medicines to cure your illnesses. As clean water, safe food, good roads, clean air, scientific research, are the kind of things your “punishment” (and my taxes) pays for.

    • guest on April 12, 2016 at 12:36 pm

      brainwashed

      • Anne on April 12, 2016 at 12:40 pm

        Pot calling kettle black.

    • Rick081956 on April 12, 2016 at 1:11 pm

      Anne, I have lived in a state for half my life. I will move to another as I retire. Why would I move to where I am going to be burdened. he paid in for years when he could have avoided it. Sometimes it is time for a change. Good for him, he paid wen he was there, he won’t when he is gone.

      • Anne on April 12, 2016 at 1:19 pm

        You are not burdened, you receive services for your taxes. Read the above regarding clean air, water, safe food, good roads, safe and up-to-date infrastructer– this country is crumbling thanks to the American view of “Individual Liberty”, yet absolutely no “civic responsibility”. As in, we will go to war, but don’t worry about it, you can shop.
        So depressing.

        • guest on April 12, 2016 at 2:16 pm

          What about states tax and sales taxes and all of the other taxes we pay? Why does your income have to be taxed? And your naïve if you really believe that it goes to the things you mentioned.