What a huge disappointment.
Not only did Obama and Congress NOT reduce spending and the deficit, they increased taxes and will continue to pile on the debt! In all the media hyped “noise” and grand standing by politicians one important component was left out…the American peoples’ desire for fiscal responsibility. Here’s a rundown of what politicians enacted, when they had the opportunity to achieve some very positive things for the United States and its citizens:
• Taxes on income, capital gains and dividends on high earners increased
• A 3.8% surcharge (tax) from the Affordable Care Act
• Every American who works will see their payroll taxes increase by about 2%
(See the Tax Foundation’s Tax Policy Calculator) Once you’ve filled out the information, there are three columns showing your 2012 tax liability, what you will pay in 2013 (provided President Obama signs the compromise bill), and what you would have paid if we had gone fully “over the cliff.” Nearly everyone will see a slight increase from 2012 to 2013 because of the expiration of the payroll tax holiday, but everyone will pay less than if Congress had done nothing. The Tax Foundation’s Tax Policy Calculator is available here.
• 5% increase in the Estate Tax to 40%
Originally, the Simpson-Bowles deficit reduction committee (also known as the Super Committee) had a target of reducing the federal government’s deficit by $4 trillion over 10 years. Instead, the new legislation will increase America’s federal deficit by $4 trillion over the next decade according the congressional budget office.
Is something backwards about this, or is it just me?
In any event, as my previous email stated after the November elections, Obama and Congress ran out of time and still have to deal with the mandatory spending cuts that were suppose to go into effect on 1.1.13 (that was pushed out 2 months), and agree on whether to raise the government’s debt ceiling (we top out at about $14.6 trillion and are due to hit that level in one to two months.) Obviously, since politicians are against fiscal prudence, the debt ceiling will have to be raised, and we will have to borrow even more money from foreign governments to finance our spending.
Here are three things you can do to protect your personal economy now and going forward:
1.) Make sure you have confidence in your wealth advisor, tax advisor and estate planning advisor and communicate with them regularly.
(A good resource to use to check out a new advisor is www.ethicscheck.com )
2.) Vote smarter – check your representatives’ voting records and what their visions are for how our country should run and what government’s role should be.
3.) Avoid the media “noise”. Limit your exposure to over-dramatic headlines and lead stories. Instead, focus on the facts and the fact that you (and your advisor) have taken all necessary measures to put you in the best possible position to ride out volatility and uncertainty. (See this Forbes article for 8 good tips to protect your finances).
As always, our investment models will focus on our clients’ risk tolerance, time horizon, quality and diversification. It’s amazing just how well the best run companies have done whatever is necessary to focus on their earnings, cash positions, management team, dividends, etc. Rest assured that at Murray Financial Group, we always strive to provide authentic leadership and knowledge resulting in conservative wealth strategies.
This columnist makes a great point…
“The United States has now acquired an electorally powerful liberal bourgeoisie who are convinced, as their European counterparts have been for several generations, in spite of all evidence to the contrary, that public spending is inherently virtuous, and that poverty can be cured by penalizing wealth creation. and that government intervention can engineer social ‘social fairness.’ but just when some of Europe’s political class has begun to appreciate the dangers of this philosophy-that taken to its logical conclusion, it leads to economic stagnation and social division-America seems to have decided that it is the quintessence of enlightened sophistication.”
-Columnist Janet Daley, writing in the London Telegraph, 11/10/12