Tax & Financial Consulting Services
No Matter Who Sits in the Oval Office Next, Expect Higher Taxes!
I don't often agree with Sen. Hillary Clinton (D-N.Y.), but she told the truth at a recent presidential forum hosted by CNN:
"(We)...can't just let business as usual go on, and that means something has to be taken away from some people."
Hillary's right, although not for the reasons she'd like to admit.
Out-of-control entitlement programs, pork-barrel spending, and open-ended wars in Iraq and Afghanistan mean that it's a foregone conclusion that "something has to be taken away from some people."
And that makes tax hikes a near-certainty in 2009, after the next election.
That election is now less than a year away. No matter who wins it, you can rest assured that the new President will call for higher taxes.
Our next President will have very little choice - if they want to cover Social Security, Medicare benefits and other debt obligations in our "pay-as-you-go" system. And how enthusiastic do you think that Hillary, Obama, Michael, Rudolf or any other leading presidential candidates will be to take away these benefits?
Not to mention our new President will have to cover at least some of his (or her) campaign promises. And that means more funding.
Soak the Rich! The fact is that none of the major candidates - and virtually no one in Congress - is willing to propose making radical reforms to entitlement programs and spending priorities. But with baby boomers (and the U.S.'s largest voting population) now entering retirement age, someone has to pay for them. And what better way than through the time-honored tradition of "soaking the rich?"
Already, the wealthiest 1% of taxpayers pay 35% of all federal income taxes. The top 10% pay more than two-thirds of the income tax. Yet, Congress and the leading presidential candidates want wealthy taxpayers to pay even more.
Currently, Congress is considering legislation:
> To impose a 4% surcharge on individuals and families on income above US$150,000 and US$200,000, respectively. That surcharge would rise to 4.6% on individual and family income above US$200,000 and US$500,000.
> To allow the tax cuts of 2001 and 2003 to expire. Here, Congress doesn't need to lift a finger. The 15% tax rate on most long-term capital gains and qualified dividend income expires at the end of 2010. Beginning in 2011, dividends will be taxed at your marginal tax rate. Capital gains rates will return to 20% (10% for low-income Americans). The top marginal tax rate will increase from 35% today to 39.6%. Finally, estate tax would apply at a maximum rate of 55% on estates larger than US$1 million (US$2 million for a married couple).
> To eliminate the US$97,000 ceiling on Social Security tax payments. A self-employed American making US$250,000 a year currently pays US$12,125 in Social Security taxes. If the threshold were eliminated, that tax will jump to US$31,250.
> To tax publicly traded partnerships (i.e., investments for which you receive a K-1 each year) at the 35% corporate rate instead of the current 15% capital gains rate.
> To greatly reduce your ability to avoid paying tax in deferred compensation arrangements.
>To impose a "mark-to-market" exit tax on individuals who give up their U.S. citizenship or long-term residence to avoid tax.
Fortunately, it's not too late to deal with the inevitability of higher U.S. taxes in the years ahead. By planning now, you can dramatically lower your future tax burden...and the greater the tax hikes imposed, the more you'll save. Combine this planning with a tax-compliant offshore structure and you'll enjoy the benefits of increased privacy, asset protection, and investment choice.
If you want more information on how to do this, visit http://www.sovereignsociety.com. Become a member and watch your frame of thinking change. If you want the knowledge on how to protect yourself and your wealth, I highly recommend visiting the site and signing up as member.
Tax & Financial Consultant, RFC
866-361-3872 toll free fax
"The great end in life is not knowledge but action."
Thomas Henry Huxley