Tags: denis | kleinfeld | Investors | Advisers | Must | Overcome | Govt

Investors, Advisers Must Overcome Govt Challenges

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Monday, 21 Feb 2011 03:16 PM Current | Bio | Archive

The investment and commercial revolution is here and we all have new roles to fulfill.

All the economies of the world are interconnected to a greater or lesser extent. The consequence is that investors and their financial advisers are following new guidelines as set by the government and their bureaucracies.

Globalization and information technologies have created a revolutionary renaissance. The political battles are growing between the old entrenched political establishments and the younger demographic groups whose focus is primarily on gaining their share of the economy. The fight is on.

The bureaucrats who want to keep in power maintain the voters as their piggy-banks. They like the idea of investors and their financial advisers being merely an extension of governmental compliance servants and officers.

The investors and financial advisers, on the other hand, want to see smaller government and a lot less tax and spending.

Government has been trying to use increasingly complex and draconian financial laws as the cover for their efforts to keep themselves in office and all the power and benefits that come with the positions. This can be most clearly seen in the area of tax.

Within the United States and externally, there has been an absolute flurry of activity by governments, quasi-government organizations, supporting foundations, and think-tanks to blur the lines between legitimate tax-minimization planning and the expansion of capitalism, and tax evasion.

However, the new view of tax is now merged into the realm of money-
laundering. Capitalism is being treated as if it is some dirty four-letter word.

Without question, the implicit and explicit implications are that formerly independent financial institutions and planners are on the front line and are the first to be primarily liable for increased due diligence and tax/regulatory compliance.

Let me be clear. I am absolutely against tax evasion. We need a properly functioning government to support the institutions that make capitalism, and thereby financial security, work. However, I do think that if the civilized world changes to consumption tax system, that is a sales tax system, then most, if not nearly all, of these difficulties go away. After all, none of us have very many tax issues when going into our local fast food hamburger joint and when paying the bill, also pay the tax.

It is the political failure to adopt today a 21st century tax system that is crippling the economies of the United States and most other countries right now.

Effectively, technology is creating a revolution in the ability to efficiently deliver domestic and international financial and legal services. In fact, professional advice for even the smallest of investors is more important now than ever.

Traditional investment planning and related legal advice has, without question, become more a matter of disclosure and compliance with governmental requirements of all types, sizes and descriptions.

Investors and their advisers (financial, legal and others) need to adjust to their new roles in attempting to maximize potential financial opportunity yet comply properly with ever-increasing governmental compliance requirements.

Personally, it seems clear to me that the existing income tax system and financial regulatory system is not only flawed, but it is failing rapidly and will be unable to allow government on the federal or local level to function properly. That is, unless there are some politically difficult major changes made very quickly.

I'm not holding my breath on this.

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Kleinfeld
The investment and commercial revolution is here and we all have new roles to fulfill. All the economies of the world are interconnected to a greater or lesser extent. The consequence is that investors and their financial advisers are following new guidelines as set by...
denis,kleinfeld,Investors,Advisers,Must,Overcome,Govt,Challenges
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2011-16-21
Monday, 21 Feb 2011 03:16 PM
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