Created: December 26, 2021
Modified: September 9, 2022

Episode 62: Are Taxes Going Up?

The question we’re answering today is, “Are Taxes Going Up?”

Taxes & The Government

I will say, if I was a betting man, yes, taxes are absolutely going up. In fact, personally, Wendy and I in our household made some changes in 2021 because we anticipate that our tax rate, the taxes that we pay as a couple, will be higher in the future than they are today. Now, there’s a couple of ways to approach this. One is, are our taxes overall going up? Absolutely. The government has borrowed a ton of money this year and to pay for it, taxes have to go up.

Tax Rates

It also seems to be in fashion now to bash people that make a higher income. There’s a perception that they’re not paying their fair share. Unfortunately, people that make a higher income are often those that employ people, whether it’s the way they spend money or whether they own companies. Quite frankly, some people that make a higher income are paying 60% of their income to taxes. Can you imagine that? 60% of what you make to taxes. I don’t care how much money you make, there’s a question whether that’s even moral or not for a government to tax that high.

Takeaways

Regardless, taxes are probably going up because again, the government has borrowed a ton of money to stimulate the economy due to Covid, and someday they’re going to have to pay that money back. You need to make some plans now, and maybe you should pay some taxes now, like Wendy and I have decided to do, so that you don’t have to pay higher taxes in the future.

Tax Strategies for Retirement
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For example, if my tax rate today is at 40% and in the future, I’m worried it’s going to be 55%, I can pay taxes today at a 40% rate instead of waiting until later to pay taxes at a 55% rate. That might not be your situation, you may be in a lower tax bracket in the future. Therefore, a good financial plan needs to be made so that you can decide, hopefully with a good financial advisor or tax professional, whether it makes more sense to pay taxes at today’s rate or wait until later. And the big key there, the big variable is what is your tax rate going to be? But ultimately, higher taxes, I think, are here to stay.

Thanks for joining me and I hope you found this information helpful!

P.S. If you enjoyed this topic and want to learn more, download your copy of our guide, “Tax Strategies: Buckets Create Tax Choices”.

P.P.S. Feel free to submit questions here for a chance to have them answered!

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