We are all aware that for the past couple years tax rates have been incredibly low. For a look at how the current tax rates compare to past tax rates take a look at this snapshot of the Truth Concepts Calculator. Many would argue that taxes are being held artificially low as our debts as a country continue to grow out of control.
Recently the state of Illinois increased its personal income tax rate by two thirds, from 3% to 5%. This along with a corporate tax hike was introduced with the hopes of whittling down the state’s $13 Billion deficit. Illinois is not the only state working to reduce a massive deficit.
California governor Jerry Brown is looking to extend tax hikes passed in 2009 for five more years in order to close the state’s huge budget gap, estimated at $25.4 billion. In Florida more tax cuts could be on the horizon regardless of the looming $4 billion shortfall. In Georgia there is a proposed ‘workaround’ to tax cuts – to make up for lost revenue a tax could be placed on groceries (for the first time in 15 years) and other services.
Simple economics will tell us that at some point in the future, either sooner or later, taxes will need to go up in order to pay for the debt our country has racked up. Whether it’s a blatant hike in the state and federal income taxes or a subtle silent tax on goods and services there is no way around the fact that your taxes will, in some way, need to rise in order to bail out our country.
The question is do you want to continue to defer or postpone your taxes until a later date? Of course there is no guarantee that taxes will go up but judging by the current deficit status of the nation I’m not going to take any chances, I would rather pay my taxes now, at the current rate, than put it off and pay an unknown tax rate at sometime in the future.