What can you predict for our tax rates in the future? This is a question that I get asked quite a bit. If you remember, President Obama said in his campaign that he would raise taxes for the rich, and this was defined as those that have taxable income in excess of $250,000. These are the same folks that are already footing about 65% of the taxes already. In fact, if you taxed these "rich" people at 100%, it would not solve the trillion dollar annual deficit we are now expected to carry for the forseeable future. Next thing to consider is that the people making over $250,000 are generally the same people that are providing the jobs. When they are over taxed, they hire less and make cutbacks. You can see where I am going here.
How does this affect future tax rates? Well, if we cannot get enough taxes from the "rich", and Congress does not cut spending (they have not shown a propensity to do this), then Congress must raise taxes further. This will mean lowering the bar from the $250,000 level. My best guess is that Congress will have to raise taxes for those that make $75,000 and above to make any headway on the deficit, and fund current programs. Thus, your tax planning for the future should consider this as a highly probable event. Consult with your tax adviser to determine what this means to your individual situation.