The Finance Blogger

Are Taxes Going Up?

Are Taxes Going UpFor many years Canadians have looked on the US and been envious with the lower taxes on virtually everything compared to what Canadians are paying. Sure we have better health care in that everyone is covered. But what many American do not know is that we must wait a long time to get the care we need. They are seen within weeks, where we must wait months or years to see a specialist. That is really the subject of another post which we will discuss sometime in the near future. For now, are taxes going up?

This post is more to do with taxes that Americans currently pay and were they are probably going to go. Of course I have to say up front that this is from a Canadians perspective watching what is going on in the United States, knowing what we pay here in Canada.

Are Taxes Going Up – What Will Impact the Taxes You Pay

Consider that you have the following things that are going to contribute to these potential tax increases:

  • The Afghanistan war
  • The Iraq war
  • The Health Care bill
  • The negative economy generating less tax income
  • Interest rates are on the rise
  • State governments are broke
  • Most likely Municipal Governments are broke as well

All of these items have huge bills associated with them and income from tax generated areas is way down as well. Somehow the government has to pay for all of this stuff and it does not come free no matter how much money you print. So where is it going to come from? Here are a few areas:

Gasoline – Canadians are paying $4.53 per US gallon, while many states the price of gas is under $4.00 per US Gallon. Here is a big opportunity to increase the income for states as well as the federal government.

Beer, Wine etc – Again Canadians pay from $30 to $40 per case of 24 bottles of beer. In the US we have bought cases of 36 for around $20. Another huge increase all on the consumer is possible here as well.

Sales Tax – In Canada  right now, we are paying 13% were in many states that we have traveled through, the tax is around 8 or 9%. Even in cash strapped California, it is only 8.75%

It is well known that taxes on income are much lower for US workers than Canadians.

Health Care Tax Increases

Yes you have to pay for health care, however so do we. Most Canadians pay $600 a year as a surcharge on their taxes for health coverage. This may not sound like much,  however you still have to pay for all of your drugs, dental and Vision coverage on top of everything that the government pays for. The real big advantage for Canadians  is that you will not go bankrupt from medical bills. You might die before you get treated,  but you will be covered!

These are just a few examples of what is coming to the US consumer as governments in the US try to find ways to generate more income to help them meet their bills. Oh and I forgot, one other area. This is what we call user fee’s.

Every time you go to a park, use a hockey rink, rent a soccer field, all of these fees are going to be increasing as well. In short we are about to see a huge inflationary spike driven by increasing government taxes and the rising cost of oil which impacts everything.

Get ready America, there is going to be a lot less money in your pocket and more in the hands of government! They will spend it on some good things and they will also waste it on many things that you will not agree with, but rest assured you will be paying a lot more taxes than you are today, if you are working.

Comments are welcome, either agreeing or disagreeing. Just keep it clean and professional.

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