Tax Increase Could be Looming Over Americans

Online, September 22, 2010 (Newswire.com) - Most Americans are now aware that with no congressional action, the so-called 'Bush Tax Cuts' could expire at the end of the year. But do they know that could result (by default) in a tax increase?

Noted financial advisor Dennis Tubbergen frequently discusses the U.S. and world financial markets in his economic blog and his Moving Markets monthly newsletter. Tubbergen, who is CEO of USA Wealth Management, LLC, a federally-registered investment advisory company, doesn't know what the end of 2010 will bring as 'nothing is a given' when it comes to politics.

"While the Bush administration showed little fiscal restraint, neither has the Obama administration," notes Tubbergen. "Arguably, the current administration has simply accelerated the rate at which our debt has grown."

Tubbergen feels it is too early to determine what might happen as far as the Bush tax cuts are concerned.

"If no action is taken by Congress, there is at least one potential negative for the markets," he warns. "The top income tax rate on dividends could increase from 15 percent to 39.6 percent - and that would not be good news for equities."

In a September 13, 2010 New York Times article, Congressman Joseph Lieberman is quoted from a speech given to the Chamber of Commerce in Middlesex, Conn. "I don't think it makes sense to raise any federal taxes during the uncertain economy we are struggling through. The more money we leave in private hands, the quicker our economic recovery will be."

To add to the difficulty of forecasting an outcome on the tax issues, Tubbergen points to the current political climate and the November elections which are quickly approaching.

"Based on early results, it seems that voters and taxpayers are flat out fed up with government policies," explains Tubbergen. "While there have been a number of interesting election results that invite comment, one of the most interesting occurred in Missouri."

Tubbergen describes this event as a referendum on health care reform called 'Proposition C' in which the good people of Missouri voted to prohibit the government from mandating that people have health insurance and from being penalized for not having health insurance.

"The proposition passed handily," concludes Tubbergen. "That can't be good news for incumbents this fall or for the administration."

For more information on Dennis Tubbergen's views, visit www.dennistubbergen.com.

The opinions expressed herein are those of the writer and not necessarily those of USA Wealth Management, LLC. This update may contain forward-looking statements, including, but not limited to, statements as to future events that involve various risks and uncertainties. Forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause actual events or results to differ materially from those that were forecasted. Therefore, no forecast should be construed as a guarantee. Prior to making any investment decision, individuals should consult a professional to determine the risks, costs, benefits and fees associated with a particular investment. Information obtained from third party resources is believed to be reliable but the accuracy cannot be guaranteed.