Listen carefully about China's increasing unwillingness to finance our national debt. They have accepted our export orders and their economy has flourished as a result, and have reciprocated by floating our trillions in debt.
Their economy has suffered, to a large degree because we are not importing in the volumes of prior years, PLUS we are expecting them to finance ever-burgeoning amounts of these deficit- and stimulus- driven debt. PLUS we are expecting to pay them less than one percent (<1%) interest on their investment.
None of us think political discussions are appropriate here, especially partisan arguing. There are plenty of blogs for that But taxation cannot be removed from the political process when it is such a big part of it. This development with China will drive taxation as never before, probably in my lifetime there has never been the pressure to tax that will come. This "kinder, gentler IRS" will be a thing of the past (if indeed there ever was such a thing).
Some of the things I'm told are in the works:
1) Increase the medical threshold from 7.5 to 10%. Gubbermint won't do anything to control these costs, but they don't want the Treasury to have to pay for them.
2) Increase the LTCG rate to 25% in two stages - a jump to 20% then to 25%.
3) Return of dividends tax rate to ordinary income instead of capital gains.
4) Make earnings from S corps subject to self-employment tax.
5) A Value-added tax, similar to what exists in European countries.
Until now many of the above-listed things have been pipe-dreams of the big spenders.
But this resistance to the deficit has not existed prior to now, so they will be forced to somehow pay-as-they-go for these popular spending programs instead of financing them with a deficit.
There are some broad choices (or combinations thereof):
a) Reduce Spending
b) Increase Taxes
c) Raise Interest Rates
d) Print Money, Ponzi schemes.or other "funny money" solutions.
I believe reducing spending is the best of the above, but the least likely alternative for the elected officials we have today.
Their economy has suffered, to a large degree because we are not importing in the volumes of prior years, PLUS we are expecting them to finance ever-burgeoning amounts of these deficit- and stimulus- driven debt. PLUS we are expecting to pay them less than one percent (<1%) interest on their investment.
None of us think political discussions are appropriate here, especially partisan arguing. There are plenty of blogs for that But taxation cannot be removed from the political process when it is such a big part of it. This development with China will drive taxation as never before, probably in my lifetime there has never been the pressure to tax that will come. This "kinder, gentler IRS" will be a thing of the past (if indeed there ever was such a thing).
Some of the things I'm told are in the works:
1) Increase the medical threshold from 7.5 to 10%. Gubbermint won't do anything to control these costs, but they don't want the Treasury to have to pay for them.
2) Increase the LTCG rate to 25% in two stages - a jump to 20% then to 25%.
3) Return of dividends tax rate to ordinary income instead of capital gains.
4) Make earnings from S corps subject to self-employment tax.
5) A Value-added tax, similar to what exists in European countries.
Until now many of the above-listed things have been pipe-dreams of the big spenders.
But this resistance to the deficit has not existed prior to now, so they will be forced to somehow pay-as-they-go for these popular spending programs instead of financing them with a deficit.
There are some broad choices (or combinations thereof):
a) Reduce Spending
b) Increase Taxes
c) Raise Interest Rates
d) Print Money, Ponzi schemes.or other "funny money" solutions.
I believe reducing spending is the best of the above, but the least likely alternative for the elected officials we have today.
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