EDITOR’S NOTE: Contributing Columnist, Steve Nicklas, expresses his views and insights on various topics of local interest. _____________
—– STEVE’S MARKETPLACE —–
If it feels like your monthly electric and food and insurance bills are rising like a helium balloon on a windy day, stay tuned.
The tax man is likely to come knocking next. And this is hardly a friendly visit or a knock of opportunity for many of us.
With a ballooning federal debt and a free-spending government, there is a likelihood of a plethora of tax increases — on everything from “sin” products to capital gains to health care. And let’s not forget your income.
To compound matters, state and local governments are essentially faced with a dilemma of either downsizing or raising property tax rates. We’ve all seen this movie before, and the ending is not usually a happy one.
Meanwhile, the federal tax picture is becoming somewhat clearer. Higher taxes are widely viewed as the answer to rising deficits and rampant spending. Such elevated taxes could have a headwind effect on any economic recovery, however.
Congress and the Obama administration are batting around a number of tax-increase strategies. These include raising the income tax rates on higher wage earners; allowing many of the previous administration’s tax cuts to lapse at the beginning of 2011; and initiating “user” and “sin” taxes on everything from tobacco to tanning salons.
Under some proposals, taxes paid on Social Security benefits could also be increased for some. And the exemption on estate taxes could return to lower levels not seen since the early 1990s (to $1 million per person).
There is some immediate tax relief, however. A variety of tax incentives or breaks were introduced for 2009, especially for those in the lower or middle class.
There are tax credits for buying a home or for making energy-saving improvements on an existing home, as well as a deduction for sales taxes paid on a new car. In addition, there are tax credits for lower wage earners and for college tuitions.
Either way, the tax landscape has changed dramatically across many areas and spectrums. While some relief is being considered for the lower income classes, a greater burden is being eyed for others.
Steve Nicklas
For many of us, however, taxes on the federal and state levels are going higher — with little relief in the foreseeable future.
(Steve Nicklas is a financial advisor who lives on Amelia Island. He can be reached at 904-753-0236 or eMail at thenicklasteam2@msn.com.)
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A four-week continuing education class, “Investing in Today’s Financial Markets,” will be offered beginning March 9 at the Florida State College’s Nassau Center in Yulee.
The class, taught by local financial advisor Steve Nicklas, will cover many aspects of the financial markets, including stocks and bonds and popular investment vehicles such as mutual funds.
The cost is $36, which includes all materials. Students must pre-register at the college and makes checks payable to Florida State College. The college can be reached at 904-548-4432.
