Austerity - Give Me More of Your Stuff - Rodney Johnson

The Greeks have passed umpteen austerity measures, the Italians are working on another, the Portuguese had to have such measures to get their bailout funds, and the French just passed their second round in a year.  If you’re wondering when we’ll get around to it here in the US don’t worry, you won’t have to wait long, and you won’t like it.

What passes for austerity, or a life devoid of extras and frills, seems to have a distinct flavoring of tax hikes.  While it is true that the French government workers will have to put in a little more time on the job, the entire nation gets to pay a higher VAT tax on restaurant meals.  Greece has instituted higher ages for retirement for the 1/5th of the nation that works for the government, and also added a square meter property tax payable through your electric bill so that you don’t cheat.  When the waves of austerity hit our shores, you can be sure that they will bring with them tax hikes, most likely in the form of reduced deductions, means testing, and higher rates on dividends and interest.  The best defense against such programs is a good offense. Be prepared.

We have informed readers for years that these days were coming.  The economy would drop, tax revenues would dry up, governments would expand social programs, and then government debt would explode.  The answer?  Not less spending! Higher tax revenue, obviously. Use your time wisely and develop the best path for shrinking your taxable footprint.  You won’t be able to avoid austerity, but you can choose to participate at a lower level.