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As New York State Taxes Rise, Connecticut Woos an Industry

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The New York Post reports that Connecticut Gov. Jodi Rell "wrote to Timothy Selby, president of the New York Hedge Fund Roundtable, last Friday warning him that a proposed $50 million tax on certain hedge-fund managers is still alive in Albany -- and that's a great reason to move their businesses and jobs to her side of the border."

Last month, New York Gov. David Paterson endorsed a plan to begin taxing the carry of hedge-fund managers who work in New York--up to 7.85%. Mayor Mike Bloomberg opposed the tax.

Selby told the Post:

"I'm encouraged that there is a politician who would have such an appreciation for this sector of the financial-services industry," and noted that hedge funds could easily relocate.

"This is an industry that can work from a laptop anywhere in the world," he said.

Paterson tried to distance himself from the proposed tax earlier this month, saying he supported the out-of-state tax only "because we couldn't get the Legislature to do the other revenue raises we thought were more constructive."

Oh, David, sweet David. Surely you can accept some of the blame for depleting the New York State's bank account?


Then why, when you traveled to the Hamptons over the weekend for Nancy Pelosi's Democratic Congressional Campaign Committee fundraiser, did you put up your security detail in the highest-end of high-end Hamptons hotels?

The State Troopers assigned to protect New York's non-elected top dog stayed at the plush American Hotel in Sag Harbor, where weekend rooms run $400 a night.

Next time, you might have one of your assistants' assistants' assistants run a quick Internet search for alternatives. There are good deals out there--and I just found some in less time than it took to type this sentence:

Oh well. Hopefully the Troopers at least got to enjoy the hotel's restaurant, which "has four separate candle-lit, silver laden dining rooms: the elegant main dining room with Steinway, the bar room with a cozy fireplace and beautiful wooden bar for those cold winter evenings, the Victorian Drew Room with prints of Lincoln and Washington and the atrium (garden room) with a skylight and intimate atmosphere – all romantic and cozy settings for a wonderful dining experience."

And about that $9.2 billion budget deficit New York State is facing?

Whatever. Just close a few schools, libraries, reduce trash pick-up and shutter a bunch of firehouses. No big deal.

POSITION:  No positions in stocks mentioned.