The comment is brilliantly stated. Read the SEC Page for background on the question they were asking for comment on.
I was suggesting a new revenue stream for financial advisors and the government is a balance sheet tax. Rather than income, the new revenue source will be based on net worth as a kind of asset based tax with accounting ramifications that would make sure to take asset based fees away from the company. A new revenue source for businesses, and a possible new tax revenue stream.
Example:
I have $1,000,000 in the bank.
I have $2,500,000 of stocks and bonds.
I have $7.5 million in real estate.
Currently, only stocks and bonds (AUM Assets under management) are charged by investment advisors for quarterly fees, and what the post is addressing is that while financial advisors are only able to charge based on how much money is under their management, without regard to how their advice affects the investor's portfolio, the next generation of financial managers should be able to advise on external assets assuming there is enough capital to advise on other things beyond the client's securities portfolio. Specifically high net worth individuals utilize wealth advisors, which are merely more experienced investment advisors that may have more training.
The new revenue stream I mentioned would put the balance sheet total amount as a possible basis to create new tax legislation. Essentially, you'd count up how much you are worth, and send a nominal fee in, in addition to the present tax paradigm, though, so there would likely be no increased efficiency, not so much because it is a new tax which is always inefficient, but that it may solve a progressive problem with our tax systems. In the above example, a balance sheet tax could be applied to corporate and private citizen alike, and some small percentage, thinking between 0.25% and 2% range based, of course, on level of financial status, that will be a nominal tax paid annually to the government as an egg management fee that goes to a bottomless pit of wasteful spending, poor legal uniformity, and mostrosity of a bureacracy called the IRS, <i>which then sends in all of their tax receipts back to you in the form of a stimulus.</i>
Wish they would have posted the actual request, it would have explained the context a lot better.
Don't tell Uncle Sam this, but under the net worth tax, there would never be a situation where the company or individual wasn't profitable enough to pay Him taxes. In other words, this basis as a means of taxation would guarantee revenue whether somebody made any money during the year or not.
It was this idea that lead me to think mutual fund distribution fees seemed confined to private pools of capital sold per share to the investor.
