Bend Over, Grab Your Ankles....

I know you’d never believe your government, particularly the Biden administration, would set out to screw you, but maybe the administration minions are not as sweet and benevolent as good ol’ Joe. They know how to sneak up on your backside.

Have you considered how inflation helps, not hurts, the government? Many of us are fortunate to be above the minimum percentage of income tax paid. Inflation affects income if you have investments in rentals or other streams closely tied to inflation. Let’s say you’re in the 40% bracket. Your purchasing power might remain the same as your, say rental income, increases.

So let say last year you enjoyed $100,000 in rental income, so for arguments sake, you paid $40,000 in income tax.

Now, rents go up, so this year you enjoy $110,000 in rental income. You’d think your tax would be $44,000.

However, remember your tax rate increases with your reported income, so with you now having the same purchasing power, even with increased income, due to inflation, your tax rate has gone up to 45%, so now your tax is $49,500. You lose! Government gains! Bend over, grab your ankles, and pray someday we get a fixed ten per cent tax rate for all of us, individuals, corporations, and other forms of business entities. Inflation will still screw us, but at least equally.

By the way, you and I are the nut in this picture for putting up with the constant reaming.