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A federal tax increase would put millions of dollars at the governments’ disposal to help balance budgets and pay down the deficit. With economic conditions where they are currently, it is much more difficult to pass a tax increase, so there will not be a general federal tax increase in the near future.
However, there are other ways to enact tax increases. One way is by using different kinds of “sin” taxes. Sin taxes impose high taxes on those who engage in riskier behaviors, such as smoking and drinking alcohol.
The federal cigarette tax increased in 2009, as did the California sales tax increase are indicators of what must eventually come to pass. While the California sales tax increase is not a federal increase, it is an indicator of what is to come. Social security taxes have been raised to help fund the dwindling trust fund that was once America’s retirement package.
Government Spending
The government is spending money to try and stimulate the economy and making a larger deficit of their own. In order to lower that deficit and pay for the stimulus money, a tax increase of some sort is eventually a necessity. Who the tax increase will affect most is what remains to be seen. Currently the spending is much higher than the income received.
What Can Increase?
Anything that has a federal tax on it can be affected. For example the cigarette tax, the tax can be increased or decreased by the government. The only people that the tax affects are those who purchase cigarettes. So even if there are multiple tax increases an individual might not always be directly affected by it.
Because of the depression in the economy we will continue to see different tax cuts and tax increases. These measures are a way of trying to level out the economy and make it more efficient.
