“Unquestionably, there is progress. The average American now pays twice as much in taxes as he formerly got in wages” – H.L. Mencken 1880-1956
As many business owners, professionals and affluent individuals continue to absorb the implications of the financial irresponsibility of the Bush administration and the constraints that President Elect Barack Obama is faced with, I’m sure many of you are concerned about the impending tax increases and threats to your wealth and privacy. It appears we will be paying more in taxes with little benefit while the government mismanages the revenue it already receives.
What concerns me is a section of the recent bail-out package regarding financial institutions. You can read more about it at: frwebgate.access.gpo.gov/cgi-bin/getdoc.cgi. The essence of this embedded legislation amongst 169 other pages adds to the government’s ever increasing presence in our “private” financial affairs by legislating that financial institutions will be required to - financial institutions will perform all such reasonable duties related to this Act as financial agents of the Federal Government as may be required. This is the verbiage in the passed legislation.
Looking at this objectively, the government can now effectively exchange with each of us an I.O.U. for the balance of our accounts if they deem there is a crisis as defined by the administration necessitating the confiscation of our assets.
Are there solutions to securing some of your wealth? I believe there are.
For business owners, professionals and affluent individuals, using flexible risk management strategies encompassing international diversification and accounts not under federal jurisdiction would be a favorable option providing a multitude of benefits. Domestically, the use of variations of personal benefit plans and specialized carve-out pension plans can accelerate wealth accumulation. However, to restrict access to account values by the government, you should consider holding the accounts internationally (with full required U.S. disclosure and reporting). By holding the account balances in this manner in the event of economic strife, while you would be taxed on income you receive, the account values would remain solvent and untouchable.
A lot has changed since 1956. The government through executive orders is encroaching more and more on personal liberties and freedoms, the only true security we have is that which we take upon ourselves to create. After all; It’s Your Money!
For a consultation regarding financial strategies for your unique personal circumstances, call Bill Faiferlick.