With as much debt that the Federal Government has managed to accumulate, things may not look good for the taxpayer. Even with the recent economic stimulus aid package that the government has sent out, which is composed of tax rebates meant to revitalize the economy, the situation seems to be pointing to the possibility that taxes will rise.
Taxes were originally cut heavily in the past to foster economic growth, and they worked pretty well in doing so. An aspect of the plan that failed, however, was that more people would be paying their taxes, and more often, offsetting the rate of federal spending. The end result is a growing pile of debt for the government, and the most likely solution is that the government will raise taxes in order to compensate for the spending.
Another factor that makes higher taxes a reality is the growing number of baby boomers who are nearing retirement age. In fact, over 75 million American individuals are expected to hit the age of 65 soon, which is when they’ll be eligible for Social Security. Another side to this issue is Medicare, which is something else that they’ll be eligible for in the coming years.
According to critical research done by the NC-PA, or National Center for Policy Analysis, if the low tax rates of today remain in place for these programs, then over 76% of all federal income tax in 2050 will be used to pay for just those two programs alone. That spending comes before defense, health care, national parks, and many other things that the Federal Government handles.
In the end, something has to be done to handle the growing debt of the government, and one of solutions that will be most definitely considered is to stop the low tax rates that have been put into place since the end of the last century.
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