Senate Finance Committee Chairman Ron Wyden recently proposed a policy that would change the way that exchange-traded funds (ETFs) are taxed. Not only would it not bring in additional revenue but it is also proof that our government is too big. Senator Wyden’s proposal is a band-aid on a band-aid to a policy that was written to address something that shouldn’t have been needed in the first place.
ETFs are great. They are an investment vehicle that large and small investors use to diversify their holdings. They give small investors the ability to invest like big investors, but without the overhead. And, there are ETFs that fit just about anyone’s tastes, risks, political leanings, or moral philosophies. They are diverse, abundant, profitable, and interestingly have some tax advantages that make them even more attractive – or efficient which is the key in this case.
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