Investing legend Julian Robertson has a lot of pet causes. Taxing fat people. Seeding the Julian Robertsons of tomorrow. Making, selling wine, and drinking wine. None of these pursuits come close, however, to the way he feels about, and the resources he puts into, his number one passion project: not paying New York City taxes.
Robertson, you see, owns homes in both NYC and on Long Island (and elsewhere of course), and when the time came to fill out his taxes one year, said that he was a resident of New York State but not New York City, in an effort to avoid paying an additional $27 million. The State Department of Taxation and Finance, thinking Robertson had spent a few more nights on Central Park South than he was copping to initiated an audit, probably thinking they’d caught a big fish in a little barrel. Sadly, they had no idea who they were dealing with.
Painfully aware that setting foot in New York City for any period of time on any given day counted as a “NYC Day,” unless he was in transit to an airport, Robertson, with the zeal of the retiree that he is, made it his business to record more than 183 “non-NYC” days, and not get penalized for rookie mistakes like leaving NYC for Long Island after midnight, even if it meant he had to hijack the occasional pedicab to do it. Also helpful was the fact that Robertson had zero qualms about annoying the shit out of his assistant by checking and rechecking that she was properly recording ‘NYC Days” versus “Non-NYC Days.” For those of you keeping score at home, all of this, plus the presentation of “evidence that he had his assistant painstakingly collect to account for his whereabouts each day,” meant that Robertson was successfully able to argue that he was not a resident of NYC in the legal sense of the term, and did not have to pay many millions in back taxes.
So you can imagine the anger and fear with which Robertson must have read this proposal in the Times, flabbergastedly spitting out his Melba toast and sweating profusely at the thought of having to spend even more time on Long Island.
Tax law in New York City is determined by New York State, not the city, so the mayor has only the power of persuasion. But the mayor can be a strong advocate. A tacit goal of the Bloomberg administration seems to have been to woo the world’s superrich with generous tax treatment, in what seems to be a continuing global competition with London, Hong Kong and Singapore. That’s not all that surprising, considering that Mr. Bloomberg is a billionaire himself, with a primary residence in New York City, a $20 million apartment on London’s Cadogan Square and a getaway in Bermuda. Attracting the superrich may well bolster some tax revenue and confer benefits on the city and its more ordinary residents, but the question remains, can and should they be asked to pay more? “It certainly might be more palatable for a new mayor, subject to the approval of the Legislature, to inflict pain on those whose resident status is purely a fiction of the law, rather than on real residents, meaning those who are domiciled in New York and vote there as well,” said Robert Willens, the president of a tax and accounting service in New York City and adjunct professor at Columbia Business School. “I can see this sort of a change as one that a new mayor would seriously consider.”
Ultrawealthy nonresidents who own property in New York City certainly make a ripe target for potential revenue. People who spend fewer than half the year in New York City don’t pay any city income tax, even if they generate much of their fortune in the city. Many have elaborate systems for keeping track of their whereabouts. Since even one minute in a 24-hour period may count as a day for residency purposes, there’s often a frantic, Cinderella-like dash to cross the city line before midnight, although it’s black limousines ferrying the passengers rather than horse-drawn carriages.
And while this proposal will almost certainly not come to pass, if we know Julian Robertson, he’s not taking any chances. It’d be surprising if he hadn’t already gotten his assistants on the horn and tasked them with spending thousands of man-hours building a new, more flexible scheduling system and getting the permits to construct a high-speed zipline from his office on Park Avenue to his house on the Island. NYC taxes, his ass.