O P I N I O N
Stand up. Speak up. It’s your turn.
One of the most important aspects of the American Dream is getting further and further out of reach—retirement. Since the mid-1980s, the average retirement age has risen steadily, meaning seniors are staying in the workforce longer. And more studies find that about half of today’s households won’t be able to maintain their same standard of living in retirement. This does not bode well for a country that advertises itself as a pinnacle of upward mobility.
With retirement becoming increasingly out of reach, the last thing we should be doing is introducing new taxes on the retirement savings of Americans. Unfortunately, a new proposed tax in the Senate—the financial transaction tax—would do exactly that.
I am a 35-year union member of IBEW Local 2320. One of the many benefits union members are promised upon joining is to receive a pension, rewarding us for our years of hard work. In New Hampshire, full-time state, county, municipal employees, teachers, police officers, and firefighters also have access to pensions. As a state senator, I proudly prioritize a secure retirement for these essential workers, which also generates six dollars of economic activity in our state for every taxpayer dollar put in. These benefits are earned over long careers in service to our state and allow our frontline workers to retire with financial security.
A financial transaction tax, like the one proposed in the Senate, poses and undermines the retirement security of all Granite Staters. Pension funds do not just sit stagnant, collecting dust. They are invested in the stock market to maximize returns for the pension beneficiaries. And as I have already laid out, these beneficiaries are not Wall Street bankers or hedge fund managers. They are the every day, working people of New Hampshire. The financial transaction tax would place an additional burden on these pension funds, taking much-needed money away from union members, retirees, government employees, and seniors.
It’s not only pension plans that would suffer under a financial transaction tax. Hence the name, all savings or funds invested in the stock market would be subject to the same tax. This means that anyone with their own retirement savings account, such as a 401(k), would also pay, potentially postponing their retirement by two and a half years, or even more. 529 education savings accounts would also be affected. Any parents or grandparents working hard to send their child or grandchild to the school of their dreams would be set back.
While I still plan to work hard on behalf of the people of Manchester, Hooksett, Bow, Dunbarton, and Candia for many more years, I do hope to retire someday. I want my three children to be able to attend the college of their choice, and I hope to help them out financially with their education. Thousands of other people in New Hampshire share these same goals. I hope that our U.S. Senators can see the problems with a financial transaction tax and defend the retirement savings of the people of New Hampshire.
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State Senator Kevin Cavanaugh has represented Manchester, Hooksett, Bow, Dunbarton and Candia since 2017. He serves on the Senate Commerce and Executive Departments & Administration Committees.