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You Can’t Handle the Truth: When I was in politics for ten years as a member of the Virginia legislature, most politicians believed that the “people” couldn’t handle the truth. My experience was that people didn’t like to hear about the harsh realities that government often faces.
Obama Tells the Truth. President Obama did a public service for the country when he said the US is going bankrupt unless we raise taxes and cut spending. Now, the President didn’t say it exactly that way, but the pending health plan in the Senate recommended by the President relies upon decreasing expenditures for Medicare and Medicaid and raising taxes. New Hampshire Republican Senator Gregg claims current and proposed spending will lead to bankruptcy for the United States.
Unsustainable Budget. In our private client letter mailed in December 2008, I quoted: “Under any plausible scenario, the federal budget is on an unsustainable path”-Peter Orszag, Director, Congressional Budget Office, December, 2007. This was before the historic spending of 2009. In our Prepare for the Return of the Estate Tax, we provided the numbers which show how the government is going broke. The Obama Administration is projecting a $9 Trillion deficit in the next ten years. This is more debt than America accumulated from 1789 to 2008 combined. The Heritage Foundation says the correct number is $13 Trillion
over ten years with the national debt being equal to the entire production of the country (GDP) by 2019. At some point, the federal government will no longer be able to borrow money at acceptable rates to finance spending. The projected rates of spending will force punishingly high taxes on individuals, businesses and the economy. So, what do you do if the US government goes bankrupt?
Capital Gains. The 15% federal capital gain rate expires by law at the end of 2010. Rates will go higher. Strategies include selling of stock now with capital losses to store up loses against future taxes, use of charitable trusts to postpone or avoid gains and use of tax deferred exchanges for real estate.
Income Taxes. The maximum 35% personal rate expires at the end of 2010. Rates will probably go to $39.5%. With increases in state taxes, phase out of deductions and the raising of the ceiling on withholding taxes, the effective rate could be near 60%. Business owners will increase corporate perks and take another look at deferred compensation planning. Tax payers will seek charitable planning, annuities, life insurance and tax shelters.
Estate Taxes. We predicted the $1,000,000 exemption and 55% tax rate is coming back in Prepare for the Return of the Estate Tax. There are time tested techniques to legally reduce your estate taxes to zero even if you have a large estate.
Decline of the Dollar. If the US government goes bankrupt, the value of the dollar will decline greatly and the prices you pay will increase greatly. If all of your assets are in dollars denominations, you will have to work to able to pay your bills, if you can find a job that pays enough to live on. Talk with your financial advisor about whether you should diversify a substantial amount of your portfolio into assets in currencies other than dollars, assets that will retain their buying power or other defensive moves. There is a historically wide variation of opinion among economists as to whether we will have inflation or deflation.
Health Care. It is well known and documented that the path to saving on personal health care expenses is to control your weight, exercise, get a good nights sleep, avoid fast foods, eat a Mediterranean diet, avoid harmful medicines, have a warm and loving family, avoid narcotics and excess alcohol consumption, reduce stress and feel you are making a worthwhile contribution to your community. Sounds simple enough-for the perfect person. A large number of people I know think that their health care is in their hands and that they will not be able to depend upon a government provided health care system. My personal recommendation is for you to read a book such as “Ultraprevention: The 6-week Plan that Will Make you Health for Life” by the two medical doctors who run the Canyon Ranch health spas. We will give away copies of this book to the first ten people who call Silvio at 571-633-0330 and to anyone who comes in for an appointment to plan their taxes, estate or business.
Be Ready. Call us to have a balanced plan for the coming years of more financial turmoil.
Obama Tells the Truth. President Obama did a public service for the country when he said the US is going bankrupt unless we raise taxes and cut spending. Now, the President didn’t say it exactly that way, but the pending health plan in the Senate recommended by the President relies upon decreasing expenditures for Medicare and Medicaid and raising taxes. New Hampshire Republican Senator Gregg claims current and proposed spending will lead to bankruptcy for the United States.
Unsustainable Budget. In our private client letter mailed in December 2008, I quoted: “Under any plausible scenario, the federal budget is on an unsustainable path”-Peter Orszag, Director, Congressional Budget Office, December, 2007. This was before the historic spending of 2009. In our Prepare for the Return of the Estate Tax, we provided the numbers which show how the government is going broke. The Obama Administration is projecting a $9 Trillion deficit in the next ten years. This is more debt than America accumulated from 1789 to 2008 combined. The Heritage Foundation says the correct number is $13 Trillion
over ten years with the national debt being equal to the entire production of the country (GDP) by 2019. At some point, the federal government will no longer be able to borrow money at acceptable rates to finance spending. The projected rates of spending will force punishingly high taxes on individuals, businesses and the economy. So, what do you do if the US government goes bankrupt?Capital Gains. The 15% federal capital gain rate expires by law at the end of 2010. Rates will go higher. Strategies include selling of stock now with capital losses to store up loses against future taxes, use of charitable trusts to postpone or avoid gains and use of tax deferred exchanges for real estate.
Income Taxes. The maximum 35% personal rate expires at the end of 2010. Rates will probably go to $39.5%. With increases in state taxes, phase out of deductions and the raising of the ceiling on withholding taxes, the effective rate could be near 60%. Business owners will increase corporate perks and take another look at deferred compensation planning. Tax payers will seek charitable planning, annuities, life insurance and tax shelters.
Estate Taxes. We predicted the $1,000,000 exemption and 55% tax rate is coming back in Prepare for the Return of the Estate Tax. There are time tested techniques to legally reduce your estate taxes to zero even if you have a large estate.
Decline of the Dollar. If the US government goes bankrupt, the value of the dollar will decline greatly and the prices you pay will increase greatly. If all of your assets are in dollars denominations, you will have to work to able to pay your bills, if you can find a job that pays enough to live on. Talk with your financial advisor about whether you should diversify a substantial amount of your portfolio into assets in currencies other than dollars, assets that will retain their buying power or other defensive moves. There is a historically wide variation of opinion among economists as to whether we will have inflation or deflation.
Health Care. It is well known and documented that the path to saving on personal health care expenses is to control your weight, exercise, get a good nights sleep, avoid fast foods, eat a Mediterranean diet, avoid harmful medicines, have a warm and loving family, avoid narcotics and excess alcohol consumption, reduce stress and feel you are making a worthwhile contribution to your community. Sounds simple enough-for the perfect person. A large number of people I know think that their health care is in their hands and that they will not be able to depend upon a government provided health care system. My personal recommendation is for you to read a book such as “Ultraprevention: The 6-week Plan that Will Make you Health for Life” by the two medical doctors who run the Canyon Ranch health spas. We will give away copies of this book to the first ten people who call Silvio at 571-633-0330 and to anyone who comes in for an appointment to plan their taxes, estate or business.
Be Ready. Call us to have a balanced plan for the coming years of more financial turmoil.
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