Financial Firms Migrating to Warmer Weather
Numerous financial firms are leaving high taxed northeast and relocating to warmer weather & places with lower tax rates. Private equity firms, hedge funds, and wealth management offices are parting the northeast and moving to Palm Beach County, Florida.
Mr. Kelly Smallridge, who is the CEO and president of Palm Beach County’s BDB i.e., Business Development Board, said that seventy-plus financial services companies have relocated to Palm Beach County in the last three years. Presently, the organization is in talks with fifteen more companies. Companies are mainly coming from three key regions, which are New York, Connecticut (Greenwich) and Boston. All these regions are impacted by the 10,000 USD cap on state and local tax (SALT) deduction. Wexford Capital and Paul Tudor Jones are some of the notable names that have relocated to Palm Beach area. Due to this increased relocation, the BDB has created a full-time section dedicated for this purpose. There is a huge concentration of wealth in this county. There are about 40 billionaire and around 71,000 millionaire households in Palm Beach County area. It is geographically located in such a manner that the residents can access a high-speed rail and three international airports. The corporate tax rate in the county is 5.5%, whereas there is no corporate income tax for limited partnerships. Also, individuals are not subjected to state income taxes in Florida. All these factors are increasing the migration of billionaires and millionaires from states which have high tax rates to Florida. This is creating a huge business opportunity for various financial firms as ‘everybody wants tax benefits.
Many regions in Florida are witnessing the trend similar to Palm Beach county. Miami Downtown is one such region. It is focusing on businesses located in Chicago-area. According to the US Census Bureau, the inflow of migrants into Florida was higher than any other state while, New York’s outflow to Florida was highest – 63,772 people. This is happening because a person earing 650,000 USD can save around 70,000 USD in taxes every year by migrating from New York to the Sunshine state.