As my college career comes to a close, I thought it would be appropriate to leave all those graduating, and those who still have a year or two to go, a few words of caution for the future. Consider it my own commencement speech if you will, but without the ceremony of course.
There is one issue that everyone must begin to take more notice of, particularly as all of us join the work force over the next few years. That issue concerns the likely rise in every person’s taxes to levels not seen before.
For those who have not been paying attention over the last year, the U.S. has become engulfed in red ink. The cause has been decades of unsustainable government spending. The country owes more than 13 trillion dollars (that’s with a T), and 48 of the 50 states in the union are also running budget deficits.
To find ways back toward a better financial situation, some in the Democrat Party are suggesting what is known as a value added tax or VAT for short. A value added tax is simply a tax on any good produced in the country, somewhat similar to a sales tax. Unlike a sales tax, which is a one-time tax at the point of purchase, the VAT charges a tax at every level of the production process.
This would raise the cost of everything we buy to even higher levels, including electronics, clothing, and cars to name a few. And if you thought the food prices were already high, expect to pay even more at your next visit to the supermarket.
The VAT is only one example of a likely tax to hit everyone. I use this particular tax as an example, but in general, most taxes already in place will likely increase.
Aside from cutting federal spending across the board, this is the only other way that the federal government can even attempt to get the deficit to more manageable levels. The financial situation that we will eventually inherit will look very different from the one our parents’ generation started with.
So why is it important for everyone to pay more attention to the current economic situation? Simply because the decision made today will affect our generation for a long time. We may unfortunately get stuck paying for the enormous debt through tax rates never before seen in this country.
This college age generation can no longer remain naive about such issues. We must stay informed and educated to make better monetary decisions for own future. The alternative is to do nothing and pay huge tax increases. How’s that for a commencement speech?