Billionaire David Tepper’s decision to leave New Jersey for tax-friendly Florida has Garden State lawmakers scrambling to find a way to avoid the edge of an income tax deficit cliff.
“We may be facing an unusual degree of income-tax forecast risk,” said Frank Haines, budget and finance officer with the Office of Legislative Services, according to Bloomberg.
New Jersey’s annual budget relies heavily on personal income taxes for as much as 40% of the state’s revenue. Currently, less than one percent of Garden State taxpayers, i.e., the uber-rich like Tepper, actually pay about a third of New Jersey’s income tax bill.
Tepper’s unexpected departure — moving his Appaloosa Management from New Jersey to Florida, pocketing those personal income and estate taxes — could mean a “one percent forecasting error in the income-tax estimate or a $140 million gap,” Haines said.
Before Tepper took his fortune to Florida, New Jersey was already facing a $1.6 billion budget gap.
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