Increasing Taxes: Solution To Decreasing Economy

Increasing Taxes

Everybody hates taxes, and much of Wall Street has poured money into Mitt Romney campaign funds to avoid paying higher ones.

And just when everyone seemed to have agreed on the idea, a shocking number of top money managers declare that they are eager to pay modestly higher rates. They reason that revenue-raising measures are essential complements to the spending cuts which they suggest are needed to control the massive U.S. budget deficit.

"It's kind of like taking a distasteful medicine. On the way down, it may not be pleasant," said Ron Florance, who helps manage assets worth $169 billion at Wells Fargo Private Bank. "But in the end, it contributes to longer-term health, and that's what we're looking for at this point."

For the last weeks, the CEO of Goldman Sachs, Lloyd Blankfein and JPMorgan's Jamie Dimon became the newest Wall Street heavyweights to say they would be willing to pay more in exchange for a deal to balance the country's books.

Paying higher taxes has always been the conventional wisdom in the world of finance and investing. With that reasonable thought however, it would make today's fragile economic climate, suppress wealth creation, curb hiring and condemn the economy to an extended stretch of slow growth.

Many who manage money for investors with at least $1 million in assets reported  in recent discussion that they do not consider a modest rise in taxes on high-income earners as it would topple the economy, markets or individual portfolios.

"It only really impacts the higher income taxpayer," said Joseph Balestrino, who helps oversee $360 billion in assets at Federated Investment Management. "They won't like it, but they're not going to be worried about putting food on the table, and I don't think it will significantly alter their spending patterns."

Posted by James Fried on Tuesday October 23 2012, 6:46 AM EST. Ref: CNN. All trademarks acknowledged. Filed under Featured News, Finance. Comments and Trackbacks closed. Follow responses: RSS 2.0