Wednesday, April 9, 2008

The Looming Tax Hike

If the theorized tax increase below is correct, then the smart thing to do is greatly reduce your 401(k) contributions (if you even have any, which it seems like might have been an oxymoronic stroke of genius), max out your ROTH IRA, and then shelter your future income as much as is legal (or ethical, your mileage may vary).

By the same token, if taxes will drastically increase going forward (which is highly dubious given the projected path is nearly linear and assumes the existing tax code will not change) then you are better off leveraging expected future gross wages to maximize short-term spending.

Woh, that was almost cogent and smart...

(click through if you don't see the chart)


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