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TAXING HEDGE FUND MANAGERS JUST LIKE REGULAR FOLKS — A MATTER OF FAIR PLAY?

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chasing more tax payers out of the state , here is a clue you dont have to live in Jersey to run a hedge fund 

JOHN REITMEYER | JUNE 9, 2017

Performance fees earned by hedge fund managers are taxed at a far lower rate than personal income. The difference to NJ: as much as $100M annually

Lawmakers in the state Assembly gave their final approval yesterday to a bill that would establish a new tax in New Jersey to make up for what many consider to be a federal loophole that delivers a huge break to Wall Street fund managers.

Portrayed by supporters as an issue of basic fairness, the legislation would levy a hefty new tax on performance fees earned by managers of hedge funds and private-equity funds that are commonly referred to as “carried interest.”

The performance fees, under current federal rules, are generally taxed as capital gains instead of as individual income. The difference can provide huge savings for fund managers because of the higher tax rates that the federal government levies on personal income compared with the rates on capital gains.

New Jersey could generate $100 million or more in new revenue according to some estimates by establishing a state tax on the performance fees. The legislation, however, would also need to be passed in several other neighboring states to go into effect in New Jersey. If it were enacted only in New Jersey, it would be an open invitation for fund managers to move to a nearby state with a friendlier tax environment.

https://www.njspotlight.com/stories/17/06/08/taxing-hedge-fund-managers-just-like-regular-folks-a-matter-of-fair-play/

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‘It’s time to hold physical cash,’ says one of Britain’s most senior fund managers

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It may be time to money under the mattress. High profile fund managers explain how to prepare for a ‘systemic event’

Ian Spreadbury, who invests more than £4bn of investors’ money across a handful of bond funds for Fidelity, including the flagship Moneybuilder Income fund, is concerned that a “systemic event” could rock markets, possibly similar in magnitude to the financial crisis of 2008, which began in Britain with a run on Northern Rock.

“Systemic risk is in the system and as an investor you have to be aware of that,” he told Telegraph Money.

The best strategy to deal with this, he said, was for investors to spread their money widely into different assets, including gold and silver, as well as cash in savings accounts. But he went further, suggesting it was wise to hold some “physical cash”, an unusual suggestion from a mainstream fund manager.

His concern is that global debt – particularly mortgage debt – has been pumped up to record levels, made possible by exceptionally low interest rates that could soon end, and he is unsure how well banks could cope with the shocks that may await.

He pointed out that a saver was covered only up to £85,000 per bank under the Financial Services Compensation Scheme – which is effectively unfunded – and that the Government has said it will not rescue banks in future, hence his suggestion that some money should be held in physical cash.

https://www.telegraph.co.uk/finance/personalfinance/investing/11686199/Its-time-to-hold-physical-cash-says-one-of-Britains-most-senior-fund-managers.html