Billionaire investor Carl Icahn is reportedly planning to move his business – and his home – to Florida, one of seven US states with no personal income tax, to avoid New York taxes, according to Bloomberg.
The 83-year-old, who was born in the Far Rockaway neighborhood of Queens, has been a major figure on Wall Street for decades, and back in the 1990s, he bought a mansion on the Indian Creek island enclave in Biscayne Bay in Miami. Icahn expects all of his employees to make the move with him: Those who don’t “won’t have a job”, according to several sources from within his firm.
According to the New York Post, any employees who aren’t ready to leave their offices in New York City and White Plains on March 31, 2020 and start work in the Magic City on the next day will be let go without severance. To “sweeten” the deal, Icahn promised that everyone who makes the move will earn at least as much in salary and bonus next year as they did in 2018, and that anybody who is fired before March 31, 2023 would get an “immediate payment” equal to that amount. He also offered employees a $50,000 “relocation benefit” that will be “payable in April 2020 once you have established your permanent residence in Florida,” according to internal memos seen by the New York Post.
For those who don’t make the move: “The company will not contest your unemployment claim.”
“The current maximum weekly Unemployment benefit rate is $450, which you can receive for a total of 26 weeks,” the letter went on to note.
More than half of the company’s employees accepted their bosses offer by the July 1 deadline.
Icahn told the Post that though he is a lifelong New Yorker, he’s ready to retire and enjoy a “warmer climate”.
“After spending my entire career in New York, while I certainly do not wish to retire, I’ve decided that at this point in my life I’d like to enjoy a warmer climate and a more casual pace year-round,” he said in a statement.
Icahn is hardly the first to move to Florida for the sunshine and lower tax rates: Hedge fund billionaires David Tepper, Paul Tudor Jones and Eddie Lampert are some of the more prominent examples. But the state has been aggressively pushing Miami as a hotspot for the asset-management industry since President Trump signed his tax overhaul into law. It notable featured a $10,000 cap for state and local deductions.
Former Governor – now Senator – Rick Scott, a one-time resident of Greenwich, Conn. made frequent trips to New York and elsewhere to court investment firms during his tenure in office.
Icahn’s decision result in serious savings. Icahn is the world’s 47th richest person, with a personal fortune of more than $20 billion, according to Bloomberg’s Billionaires Index. The market value of his publicly-traded firm, Icahn Enterprises, is $13.6 billion: It reported adjusted earnings before interest taxes depreciation and amortization of $1.6 billion in 2018.