Didn’t Realize Governor Cuomo Was This Unintelligent

The state of New York’s Governor Cuomo is upset at the tax bill.  All of a sudden, New York citizens of are going to realize the high taxes they pay aren’t subsidized anymore by the rest of the United States.  In what can only be compared to something out of Ayn Rand’s Atlas Shrugged, Cuomo has proposed a “fairness tax” to tax carried interest on private equity funds at ordinary income rates.  Yesterday, I blogged about how we don’t teach finance to our children in school.  Clearly, Governor Cuomo didn’t learn anything about finance in school or at home either.

Cliff Asness tweeted about the hypocrisy of Cuomo’s potential policy.

When you need all surrounding states to join you in confiscation you’re running a gulag not a state.

Luckily this gulag allows parole in Florida. Or maybe Texas. So many choices.

https://t.co/RkLkTfvGlV

— Clifford Asness (@CliffordAsness) January 19, 2018

Cuomo says this is to “alleviate the impacts of the Trump administration’s federal tax plan.”

He objects to the SALT deduction going away taxing his rich people more. He’s going to alleviate that by taxing rich people more.

Atlas Shrugged meets Duck Soup https://t.co/CUjUEoCLsu

— Clifford Asness (@CliffordAsness) January 19, 2018

I love it.  In many states, the bright spots of growth are the venture capital funds, the private equity funds, the hedge funds, and the real estate funds.  They take risks and create jobs.   Cuomo and others that think like him will chase that away.

This is not that much different from proposals regarding transaction taxes which have been floated by Democrats in Illinois for the past several years. The reasoning behind taxes like this are amazingly short-sighted and just dim.  Someday in the future, the entire fund management industry and capital market industry will be residing in places like Texas and Florida.  I can only expect California to pile on soon.  There will be a giant sucking sound as capital leaves the states that decide to recklessly tax it for no good reason other than to prop up their cronies.