There is no free lunch. If you aren’t going to be affected by the Federal tax increases, rest assured you will be by state and local tax increases. Every offset the Feds are trying to make with stimulus bills, etc. will be erased by the actions of states and local governments.
I spend time in two states and two cities. Arizona is forced to raise taxes to keep from filing bankruptcy. This from the former governor, spendthrift Janet Napolitano, the inept new Director of Homeland Security. She makes Geitner look like a whiz kid. Of course, Geitner will soon fall on his sword for Obama. And for Barney, Chris, and Charles. The fact that no one will come to work for him says volumes. The other state, Illinois, has already announced their big tax increase plans. The governor plans to increase the state income tax by 50%. Over 750,000 have left the state in the last decade. Over 150,000 jobs have gone away. The state has long been run be democrats. This is microcosm of what Obama plans for America. I will change my state of residency from Illinois to Arizona. Goodbye to my income taxes, Illinois.
One city has raised the sales tax 1% last year. Now, they will have to scramble since home evaluations are dropping like a rock. The other city will be raising taxes soon.
So here it comes. You will be taxed more faster than you have ever been before. In the face of all the other challenges you face. Nice.
This will assure you won’t go on any spending sprees so rest assured the economy will stay in the tank and unemployment will go up.
More help from the Feds is supposedly coming. By 2011 the OMB says the Federal debt will climb from 40% of GDP to 70%. This is exactly what the Chinese were worried about this week. As big investors in a country that has always been rock solid, the new managers of the country are turning our bonds into junk bonds.
None of this even considers things like the cap and trade tax which will effect everyone. Or, the card check which will organize businesses like Walmart, store of the poor.
Your disposable income is going to take the biggest hit in your lifetime as the tsunami of taxes hits next year. Bet your raise won’t keep pace, hence you will live smaller next year. As you tighten your belts more businesses will suffer, more unemployment will occur, and tax revenues will go down more for all governments. It’s a bad spiral. One we can’t spend ourselves out of at the Federal level.
By the time we realize we need to get taxes under control, we may have spent ourselves in too big a hole to dig out. America, too big to fail, maybe not.
