The hedge fund industry (hedge fund news) is a tempting target for legislatures in search of revenue. We've already seen proposals to tax carried interest rise and fall in Washington, and we expect another push in this direction soon.

In New York, another effort sought to more severely tax the income of managers who worked in New York but lived outside the state. The issue sparked some heated debate with NYC Mayor Michael Bloomberg weighing in on the this-is-crazy side of the debate. In the end, he prevailed.

The New York state assembly stripped the provision from a bill--to the chagrin of Conn. Governor Jodi Rell, who was actively using the tax issue to attract even more funds to the Nutmeg State. A few nights ago, she hosted some big-name fund managers at the swanky Darien steakhouse to woo the firms, according to the New York Post. You have to wonder if she's thinking about other incentives.

For more:
- here's the article

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