Wednesday, November 25, 2009
William M. Funk (Law Office of William M. Funk, New York) has published On and Over the Horizon: Emerging Issues in U.S. Taxation of Investments, 10 Hous. Bus. & Tax J. 1 (2009). Here is the Conclusion:
This article does not pretend to propose an exhaustive or systematic set of reforms of taxation of the investment management industry or of incentives for investors. Rather, this article has focused on some of the leading issues and imbalances within the system with an eye toward where financial and social outcomes may be directed. To discuss all tax policies, all current financial issues, and all consequences is a much larger undertaking than can be addressed in one or a series of articles.
What can be done is to examine where taxation of the largest and most consequential pools of capital has gone off-track from what would be the rational expectations of an observer with no vested interest in the status quo. It took many years and the influence of countless players in the tax and financial system to reach this state of affairs, proving that the worst mistakes we make are the ones we make collectively.
Realigning tax and financial policy will require many inputs from many parties, including sources that are unexpected and still unknown at this time. But the process can only start by asking knowledgeable yet basic questions about what sort of governance we wish to have. As policy-makers feel their way through this period, a different tax environment may yet emerge that will require new thinking so that taxpayers can achieve the best results in their roles as private economic actors and public citizens.