The exodus from New York City’s confiscatory income tax is largely to blame for a $41 billion hedge fund moving to Florida. The firm, Elliot Management, is one of New York City’s largest firms in terms of total assets and staff – with more than 500 employees. The firm’s CEO, Paul Singer, says he will stay in New York, while the firm’s co-chief executive, Jonathan Pollock, will head to West Palm Beach to oversee the opening of a new headquarters there.

The New York Times blamed the move, at least partially, on the coronavirus pandemic, pointing out that most employees were conducting business at home, and not utilizing the firm’s expensive downtown offices.

Elliott Management only started to explore a move to Florida during the pandemic as its roughly 500 employees started to work remotely, including from other states, the person said. City boosters have voiced concern that the pandemic has created permanent changes in the way people work that will hinder New York City’s economy, which relies heavily on office work and commuters.

While those issues might be a factor in why firms are fleeing New York, there are different reasons for why they might relocate to Florida. The Sunshine State’s beaches and sunny weather are obviously a key factor, as is the state’s low income tax rate. Even the New York Times story acknowledges this:

Unlike New York State, Florida has no individual income tax, estate tax or capital gains tax, which the state has promoted in a concerted effort to recruit financial firms from New York.

Taken together, Florida looks significantly more attractive, especially considering the significant increase in individual freedom, fewer restrictions in Florida when it comes to coping with COVID-19.

The firm’s move to West Palm Beach is expected to be complete at some point before next July. It’s not clear how many employees will make the move to Florida, nor how many local jobs might be created once they get here.

According to the Palm Beach Post, the move will occur in two phases: the first will temporarily occupy a 7,600 square foot office space, but eventually the firm plans to make a permanent move into a 25,000 square foot space once it’s ready.