Posted on | May 8, 2011 | No Comments
This week Doug Andrew discussed the following:
Upcoming Free Webinar
Attend our free 90-minute webinar live over the Internet this coming Tuesday, May 10th at 11:00 a.m. pacific (12:00 p.m. mountain, 1:00 p.m. central, 2:00 p.m. eastern), and again at 6:30 p.m. pacific (7:30 mountain, 8:30 central, 9:30 eastern). The topic is “True Asset and Wealth Optimization.” You’ll learn how to choose the right investments for liquidity, safety, rate of return and tax benefits.
All attendees receive a bonus hardcover copy of Last Chance Millionaire, Doug Andrew’s New York Times best-selling book.
Why Taxes Must Go Up
Taxes will be rising. The writing is on the wall.
Federal debt has gone from $9 trillion up to $14 trillion in the last 5 years alone.
According to an article by Curtis Dubay of the Heritage Foundation, Congress would need to more than double income tax collections just to cover the deficit and the debt that we’ve added in the last 5 years.
He says that income tax revenue would have to increase over 144% just to cover the overspending that’s already taken place.
If Congress were to only tax those making over $250,000 per year, which the president has advocated, their top tax rates would have to rise to levels of 132% and 142%.
Since it’s not possible to tax above 100%, these are literally impossible tax levels.
According to the Congressional Budget Office, if the president’s 2012 budget is enacted, interest payments alone will total $931 billion in 2021. That’s 20% of all tax receipts.
95% of all tax revenues would be spoken for by mandatory entitlement programs before Congress could even consider allocating for defense or any other essential function of government.
Raising taxes will not solve the problem as long as spending continues unchecked.
Tax rates would have to be raised perpetually to keep pace with this. This is why taxes will be going up.
The Coming Triple Whammy
In most decades, you’ll have 7 years of market growth and 3 years of market decline. If you had your money in the market during the last decade, you experienced a total of 5 down years, so your 401(k) or IRA is already behind the curve.
Most Americans are only up an average of 2.99% over the last decade thanks to market uncertainty. This is just one facet of the three-pronged challenge before us.
We also have taxes almost certainly going higher when the Bush tax cuts expire in 2012.
And finally, we have the specter of inflation on the horizon.
So how do we deal with this triple whammy?
To protect yourself from rising tax rates, you must be able to employ strategies that have been part of the Internal Revenue Code for decades. These strategies enable you to accumulate, access and transfer your money tax free.
Instead of deferring your taxes to a future time when taxes are going up, you set money aside where it will be tax free now and in the future.
Inflation can be countered by linking your return to those things that go up when there is inflation. This means inflation helps rather than hinders you.
The third danger of market volatility can be nullified by using Missed Fortune strategies that index your money to the market without having to risk your money in the market. In those years that the market grows, your money grows. In those years that the market goes down, you don’t lose your money.
The window of opportunity is short, but it’s open right now. This is the time to reposition your money in order to counter the triple whammy of taxes, inflation and market uncertainty.
Visit with a Missed Fortune advisor and take control of your financial future.
Bonus Missed Fortune E-Book: Baby Boomer Blunders The average Baby Boomer has less than $50,000 accumulated for retirement (which means many have less than that), primarily due to bad habits and having money invested in the wrong places where economic downturns can diminish their nest egg. Download this e-book now at www.babyboomerblunders.com.