Monday, 23 June 2008 08:00
A majority of the New York City Council is supporting a bill in the State Legislature that would require hedge fund and private equity partners to pay a city tax on income earned from investments. The bill would expand the citys 4% unincorporated business tax to the carried interest hedge fund and private equity partners earn. This carried interest is usually a 20% share in the profits the partners generate through the investments they make. Currently, the citys unincorporated business tax applies to the management fees charged by the partners.
Opponents to the proposed tax argue that raising taxes on New Yorks wealthiest citizens would drive them from the city. Michael Long, chairmen of the New York Conservative Party, said, (The New York Legislature) really don’t understand economics, nor the dynamics of businesses and organizations that can pick up and leave the state of New York. The bill was introduced by New York State legislator Michael Kellner and enjoys the support of twenty-six New York City Council members.