Coming Attractions

It is likely that the federal and state governments will see a huge shortfall in tax revenue over the next few years. The consequences will be different in different states, but every state will face pressures to cut spending, raise taxes, or both. Cutting spending will mean cutting popular programs, mostly entitlement programs for the feds and a variety of things at state levels. There will be populist calls for higher taxes on the rich. Of course, tax incidence means it won’t just be “the rich” who are impacted: taxes on producers ultimately are paid by consumers. Remember, all this was caused by people who tried to live beyond their means by gambling on real estate. You’ll pay for their mistake. And when we try to bail them out, youl’l pay even more. Get ready to tighten your belt.

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