The Taxation Paradox: It’s Global, Not Local

• Published in: The journal of wealth management Vol. 15; no. 4; pp. 29 - 40
• Main Authors: Horan, Stephen M., Johnson, Robert R., Robinson, Thomas R.
• Format: Journal Article
• Language: English
• Published: London Pageant Media 01.04.2013
• Subjects: Asset allocation; Asset liability management; Asset management; Citizenship; Codes; International taxation; Investment advisors; Investment policy; Portfolio management; Professionals; Studies; Taxation; Taxes; Wealth management
• DOI: 10.3905/jwm.2013.15.4.029
• ISSN: 1534-7524

Conventional wisdom suggests that taxation is a jurisdictionally specific discipline. For those advising private clients, the economic implications of taxation are a critical foundation for incorporating taxes in wealth management. Understanding the intricacies of a specific country's tax code, however, provides little insight into the economic implications of taxes and how they impact risk, return, and investment strategy. Therefore, tax-efficient asset management is a global rather than local discipline. At its most basic level, tax on investment and capital is imposed by governments in a finite number of ways. Rather than becoming experts in local tax codes, wealth managers should understand the economic principles of taxation that apply globally to avoid making decisions that may be tax wise but pound foolish. [PUBLICATION ABSTRACT]