Monday, November 7, 2011

Regardless of Super Committee Decision, Your Taxes are Probably Going UP!

Regardless of Super Committee decision, your taxes are probably going UP!

The story goes like this: a few months back Republicans and Democrats in Congress struck a deal (the key word here is deal) just in the nick of time to avert the Federal Government having to shutdown. You may remember that drama in D.C. 
The deal was, essentially, that a 12-member committee made up of six Republicans and six Democrats from guess where? – Congress – would come up with a $1.5 trillion deficit reduction plan for the next decade by November 23. Remember, this group came into being as a result of Congress not seeing eye-to-eye on exactly how to fix our deficit mess – whether to cut spending or raise more revenue. Well, long story short, it’s early November, and from what we know, see, and hear, the Deficit Reduction Super Committee is nowhere near (as in, hasn’t even begun to scratch the surface of) their $1.5 trillion target. 

What surprises me is that anyone is surprised by this outcome. Come on, are you kidding me? As I wrote on July 25, Americans should remember that we are in this fiscal mess because Congress (made up of both Democrats and Republicans) has proved to us again and again in unequivocal terms that they cannot embark upon any credible spending cuts.
As far back as I can remember, I’ve been hearing politicians campaign that, “America needs to put her financial house in order, the status quo is unsustainable, and we need to restore fiscal sanity.” Yet over each Congressional session and White House administration, for some strange reason – or, is it? – spending has always found a way to increase.

When Congress talks about cutting spending, what exactly do they mean? Social Security and Medicare? And that would be whose Social Security and Medicare? The same citizens’ who voted for them on Election Day? Notice that the whole of Congress could not come up with any credible cuts, so what are the chances that the 12-member Super Committee can pull it off by Thanksgiving? I think it would take a truly SUPER Committee to cut spending.

Let’s get realistic here. No politician – Democrat or Republican – wants to cut any spending in real life, because it could very well affect their constituents. On the other hand, it’s much easier to raise more revenue by taxing “only the ultra rich,” since most folks don’t consider themselves rich and think such raises will not affect them. After all we’re talking about “the rich people,” so taxing them more will not cause much harm. The problem with that hypothesis, as history tells us, is that most of us (the average folks, so to speak) end up paying for the revenue increases. Just look at history.

From where I’m sitting, here’s what I would tell retirement investors: If your nest egg is in the form of a yet-to-be-taxed program like a 401K or an IRA, you should seriously rethink your strategy by talking to a savvy financial professional who understands America’s current economic landscape – not one who goes along with the media frenzy of the day.

The fact is, no credible expert would argue other than that taxes are going up! Because that’s what “more government revenue” means in simple English. But for you, as a retiree, that translates to lower spendable income. Did you know, however, that some folks have their money in programs that, under existing tax laws, are completely insulated from tax rate hikes?
Contact a professional at Laser Financial Group today to find out how to legally protect your retirement income from future tax hikes. 877.656.9111 or


Chime in with your comments or questions: