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Get Ready for Higher Taxes and Fees

by Peter Stern Sunday, Mar. 01, 2009 at 9:33 AM
pstern@austin.rr.com

Americans better "buckle-up"

Now that states are in the "red" like banks, insurance and mortgage companies they are going to make us pay to get themselves into a better financial zone.



It doesn't matter that the Obama administration has provided states with a "stimulus" package because most states are in a financial mess. Perhaps, none more so than California, which has determined to hold-up sending out state income tax refund checks and will close-down government offices to a part time status, while also freezing salaries. In fact, not that he needs the money, but Gov. Arnold Schwarzenegger had better start looking for a new job since it is very doubtful he will be reelected.



Other states already are considering many ways to increase revenues while eliminating their deficits, e.g., from increasing property taxes to higher gas taxes to escalating fees and penalties and even things like raising rental car costs and the purchase of new cars at much higher taxes and fees.



While Democrats are in power at the federal level and are known to raise revenue via "tax and spend" methodologies, not all states who opt to raise revenue via increasing taxes, penalties and fees are "blue" states. Many GOP-powered states will opt to increase revenues via the same options [above mentioned CA is one of them].



Now that the Democrats are in power, even the GOP won't fight these tax increases because they can blame them on the Democrats and then use it to jockey into better position for the next election in 2010. It's a win-win for the GOP and a lose-lose for Americans, who will be struggling dramatically to survive in the hostile financial climate.



For many Americans it will be a time of extreme chaos and upheaval. The bad times will continue for several years and at least through 2011; however, we have to expect this since it took 1 decade for the economy to slide into this mega-decay. It's also important to note that while this decay began prior to Year 2000, during 7 years of its special interest reign the Bush administration, via its "tax cuts and spend" platform, propelled the U.S. into this cataclysmic financial devastation. Our top economic intelligence hid their collective heads in the sand. Consequently, it will take years to undo much of the damage of previous administrations.



But let's not forget how long it took us to get here and where the accountability lies. While it's easy to expect the new administration to fix this mess quickly, we need to give the Obama administration a reasonable amount of time to correct our current direction. The ratio of years re: over expenditures to fiscal restraint 7:2 [or even 10:2] to see some positive change is appropriate under this economic duress.



Americans will need to "buckle-up" for a very bumpy ride.

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