In the journalism dodge, we like to say we are writing the first draft of history. The problem with first drafts is that they need a fair amount of revision before they should see the light of day. That’s why all the year-end 2010 drama over extending EGTRRA and JGTRRA, aka the Bush-era tax cuts, or “giving more tax breaks to the ‘wealthy’” really needs another set of eyes. To begin, ‘wealthy’ is a relative term, and as all advisors know and most politicians should admit, those with the highest incomes pay the lion’s share of the tax burden in this country, while many lower-income people pay no income tax. Yes, the ‘wealthy’ benefit from a lower capital gains tax rate, but they are also the ones who take the risks with their capital, and in our system, those who take the greater risk have the right to reap a greater reward.
But please, put aside the invective over this president: Barack Obama is not a Kenyan socialist. As David Brooks, the house conservative on the New York Times op-ed page, put it in his Dec. 9 column, Mr. Obama has returned to his 2008 election roots, where he took the radical position that sometimes you have to work with the other party to get things done. Yes, perhaps his change of direction came from listening to the political message that was sent by those citizens who voted in the 2010 election (42% of registered voters took the trouble in the general election), but regardless of what prompted his change, let’s take a deep breath and assess the situation like intelligent people.
Politics, at least in this country, is rarely a question of black and white. To get things done, you have to compromise, since not everyone agrees with what you hold to be unassailably true.
In this country, we believe that those who succeed shouldn’t be punished. We also believe, based in large part on our Judeo-Christian heritage, that we also have a moral responsibility to help those who haven’t succeeded. The devil in politics and taxes—and in regulating the financial markets—is in the details, and that’s where the messy business of partisanship and compromise comes into play.
Advisors may have strong political opinions, but like good journalists, they should set aside their partisanship—not deny it—to serve the needs of their clients and readers, much like a President should do, since he (or she in the future) is the only elected official in this country whose constituency is the entire nation.
Advisors have to make financial plans, have to make trades, have to communicate with clients with the understanding that no one has a clear view of the future. We see through a mirror, darkly, guided by the past but not beholden to it. In the magazine and on AdvisorOne.com we’ll continue to provide you with the news and analysis and tools you need to work through these most recent changes to your regulation and the tax code, but we’ll always keep the long view in mind and hold at bay the partisan hyperbole from both sides.