Why taxing Hedge Funds an additional 19% might not be so smart

Why taxing Hedge Funds an additional 19% might not be so smart

Joining Anthony and Claudine is Bruce McGuire, the Founder and President of the CT Hedge Fund Association (cthedge.com), and also the managing partner at Global Alpha Research LLC. A proposed bill -- luckily it appears it will not be included in the Connecticut state budget this year --- but we may have to worry about this again in the future, could destroy Connecticut's Hedge Fund industry. H.B. No. 6973, “AN ACT CONCERNING THE IMPOSITION OF A SURCHARGE ON INVESTMENT MANAGEMENT SERVICES FEES: To provide tax parity. This proposal to tax hedge funds and other managed investments at 19%. The bill would impose a surcharge on income derived from investment management services (and would cover investors from all income levels). The proposal was written so broad it is unknown who it would hurt the most, or to even know if is is possible to actually enforce. Why 19%? 19% is the alleged benefit of the so-called "carried intest loophole." But the fact is there is no carried interest loophole. It is simply a derogatory term for long term capital gain treatment. How would this be a danger, not a benefit, to CT’s financial future? How easily could they just leave the state because of the high taxes? Where do you think they would move to? FL has no income tax, and no estate tax… Example:Hedge Fund billionaire, David Tepper, left NJ and moved to FL after 20 years and moved his HQ as well. He was that states’ wealthiest resident. Estimated that it will cost NJ hundreds of millions of dollars. CT Hedge Fund cluster is #2 in the world. China and Japan are very envious. In China, the total number of hedge funds almost doubled in 2016, and assets under management have more than tripled over the past 2 years. https://youtu.be/r7ue7FvVi3A IRS Medic