Senator Boucher Says Investment Management Tax Would Hurt Retirees, Parents Saving for College

State Senator Toni Boucher (R-26) today voiced her objection to a proposed tax on investment services, HB 7313, which would increase costs for individuals trying to plan for their future.

“Democrats proposing this bill are calling it the hedge fund tax, portraying it as only impacting wealthy hedge fund managers,” Sen. Boucher said. “But if you read the bill, this is a tax on income derived from any investment management services. This would apply to the services used by anyone who is trying to save and invest even a little bit of money. If you are trying to save and plan for your future, your financial adviser is getting taxed and you are the one who is going to pay.”

Sen. Boucher is a member of the legislature’s Finance, Revenue & Bonding Committee, which scheduled a public hearing on the bill for Tuesday at noon. HB 7313, An Act Imposing A Surcharge On Income Derived From Investment Management Services, would impose a 19 percent surcharge on income earned from investment management services.

“We all know how this works,” she said. “If you impose a tax on something, it increases the costs for the consumer. Investment managers will pay for the tax by increasing the cost for their services. The increased costs will ultimately come out of money people are putting away for their retirement, putting away for their children’s education, putting away to buy a house, or even putting away to have money for a rainy day. The consumer is going to get soaked.”

Sen. Boucher said HB 7313 is another example of Democrats trying to tax their way out of the state’s budget problems. A 20 percent surtax on corporations instituted a few years ago was supposed to be temporary but is still in place because of the “need” for revenue

“In 2011, we had the largest tax increase in the state’s history and here we are six years later looking at another budget deficit,” Sen. Boucher said. “It’s time to realize that increasing taxes isn’t filling the budget hole, it’s just digging it deeper. We have to climb out before it’s too late.”

Similar to a proposed tax on CPA services that was defeated by the legislature, she said the so-called hedge fund tax should meet the same fate.

Sen. Boucher represents the communities of Bethel, New Canaan, Redding, Ridgefield, Weston, Westport, and Wilton.