9.09... TAX Stock Holdings and 401K Time?
As we have seen this week, earnings to our major corporations are evaporating. It is these earnings that were major drivers for taxes last year.
In addition, earnings are evaporating AFTER millions of workers have been fired. Not only have millions been fired and still unemployed, Tens of Millions have suffered MASSIVE WAGE CUTS!!!! Many of these workers are paying no taxes or a fraction of taxes they paid last year.
In addition to earnings, sales are predictably shrinking as well, so sales taxes are contracting materially. And as house prices crash and foreclosures keep reaching record highs, property taxes are now starting to decrease dramatically.
ALL OF THE ABOVE IS OCURRING WHILE THE SPENDING NEEDS ON GOVERNMENT IS GROWING DUE TO A GREATER NUMBER OF PEOPLE NEEDING UNEMPLOYMENT CHECKS, WELFARE, AND MEDICARE AND MEDICAID ASSISTANCE....NOT TO MENTION SOCIAL SECURITY.
AND DUE TO THE CONTINUED CONTRACTION, WE ARE NOW HEARING RUMBLINGS OF ANOTHER STIMULOUS PACKAGE.
The problem is if Obama tries to print TRILLIONS of dollars with little in the way of tax revenues coming in, our dollar will collapse, interest rates will skyrocket, and America will go broke at an accellerated rate.
His only choices are cut spending or raise taxes. Any spending cut spending will need to be large.....which will drive our economy into an immediate DEPRESSION as government spend is now responsible for OVER 50% of GDP.
The other choice is raise taxes. And since fewer and fewer are earning incomes anymore, and our government's need for money is growing, really the only place left to tax is our assets. Since home prices are crashing, and so is commercial real estate, really the only place left to tax is our stock holdings and retirement accounts.
Based on my current estimates, it appears that Federal, State, and Local Deficits will materially EXCEED $3 Trillion dollars next year. Since half of America does not really pay income tax, the other half will have to shoulder the burden. And since the top 10% of tax payers pay about 80% of the tax, we will have to raise over $2.4 Trillion dollars from about 10,000,000 families....or about $200,000 per family.
Since the many families in the top 10% of taxpayers don't earn $200K, and need income to live on, the only way to raise the much needed money is to tax stock portfolios and retirement accounts.
As revenues decline, earnings evaporate, jobs are lost, wages cut, and demands on governments grow....soon you Fools will learn that there are not many choices left to keep this game going......money is running out and there is too much debt to serice.....9.09 still looks to be fine.