Many investors are beginning to think that income investing is every bit as risky as equity investing, but nothing has really changed in the relationship between these two basic building blocks of corporate finance. What has changed in recent years is the nature of the derivative products created by the wizards of Wall Street to deliver both forms of securities to investors.
Continued from Part 1...
(7) Personal Income Tax Reform. Is it enough to say that we tax pension and other retirement income, including the sacred pittance from Social Security. The income tax needs to be revised, reformed, or replaced by something. Eliminating the tax on all forms of retirement and investment income, including capital gains, rents, royalties, etc. would have incredible positive effects (and would guarantee a Pennsylvania Avenue address for eight years). The next administration could earn another eight years by combining the various Flat and Fair Tax proposals. That could double total tax revenues, reduce price levels, create/save thousands of jobs, and expand the economy.
(8) Regulate The Regulators. Every scandal produces new levels of regulations and additional cadres of secret police who raise business costs in the name of compliance with da law. Countless hours of non-productive time are mandated by broad-brush policies and procedural requirements that do little to protect the consumer--- in many cases they simply annoy the people they are supposed to assist. Financial services firms, for example, employ thousands of people to protect the firm from the examiners, not to protect the client from unscrupulous employees. I've heard similar stories of the abuse of power that seems to be SOP in most regulatory agencies.
(9) Change Exchange Traded Index Funds. Index ETFs have replaced plain vanilla mutual funds as the most popular form of speculation in the financial world today--- even more popular than sub-prime mortgage paper was just a few months ago, and with the same risks. These are glorified gambling mechanisms whose price movements have little to do with the economics (or economies) of the companies inside. Stock prices are pushed up (or down) by demand for the indices, not by their fundamentals.
(10) Restore the Up-Tick Rule. The up-tick rule that applied to short selling since 1929 was eliminated in July of 2007; the markets have been feeling the impact ever since. Theoretically, if not actually, unscrupulous persons could bring target companies to their financial knees for their own purposes. In the wake of the sub-prime mess, for example, it became difficult for some companies involved to raise capital efficiently because of shorting tactics employed by hedge fund operators.
This is my short list for the presidential candidates. Where they stand on these issues will certainly influence our economic future. Which of these is most important? I think that either Social Security Reform or the elimination of all taxes on retirement and investment income would have the biggest and most lasting impact. What do you think? Really, let me know what you think.
Investor Political Priorities - A Survey
90% of all Americans are investors and, as such, there are issues that we need to hear about from the man who would be king. None of our could-be leaders are addressing the issues that would allow us to achieve our financial goals. This is my short list for the presidential candidates. Where they stand on these issues will certainly influence our economic future. Which of these is most important?
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Investor Priorities - Part 1 <--
