- By now most people know the debt ceiling crisis has, at least for the time being, hasÃƒÆ’Ã¢â‚¬Å¡Â been handled sufficiently to avoid any worsening of the economy.ÃƒÆ’Ã¢â‚¬Å¡Â The generally negative tone we hear on the daily news as terms like recession, depression, default, and credit rating downgrades can make people pessimistic about the future. All of this is understandable but we wonder how much of the fallout from these events will eventually trickle down to us real people. BusinessÃƒÆ’Ã¢â‚¬Å¡Â is concernedÃƒÆ’Ã¢â‚¬Å¡Â aboutÃƒÆ’Ã¢â‚¬Å¡Â economic slow down asÃƒÆ’Ã¢â‚¬Å¡Â federal government agencies, big publicly traded corporations, small local companies, and pretty much everybody who spends money on anything tries toÃƒÆ’Ã¢â‚¬Å¡Â cut spending. The extent ofÃƒÆ’Ã¢â‚¬Å¡Â expected slowdown and the reduction in profitsÃƒÆ’Ã¢â‚¬Å¡Â is unknown but one thing we feel confident will happen is changes to the tax code designed to generate revenue. This part of the debt reduction equation is certain to affect everyone.So far it seems no debt reduction has been accomplished at all.ÃƒÆ’Ã¢â‚¬Å¡Â The dollar amountsÃƒÆ’Ã¢â‚¬Å¡Â seem great as politiciansÃƒÆ’Ã¢â‚¬Å¡Â take credit for theÃƒÆ’Ã¢â‚¬Å¡Â billionsÃƒÆ’Ã¢â‚¬Å¡Â in debt reductions their efforts have produced. In case you havent seen the following chart before,ÃƒÆ’Ã¢â‚¬Å¡Â this is what theÃƒÆ’Ã¢â‚¬Å¡Â latest rounds of debt reduction have produced. It’s a reframed illustration that takes away about eight digits from all the budget figures and presents information as though the US was a real person.ÃƒÆ’Ã¢â‚¬Å¡Â
Does anyone feel good about this? $385 spending reduction on a $38,200 spending budget isÃƒÆ’Ã¢â‚¬Å¡Â like aÃƒÆ’Ã¢â‚¬Å¡Â drop of waterÃƒÆ’Ã¢â‚¬Å¡Â in the ocean. Tax changes, i.e. increases seem unavoidable. Check out some of the possible solutions proposed by different groups in Washington. See debt reduction tax proposals
Check back with us often for new developments and how to keep your tax bill from growing any more than it has to.