By Andrew Snyder, TodaysFinancialNews.com
Baltimore — (TFN): Maybe it is time we took a lesson from the French. Not the new-age work-fearing, café-going French, but the old-school, take-back-the-country kind of citizens alive during the French Revolution. Those folks knew how to stand up for themselves.
History buffs will be quick to point out the similarities of late-18th century France and modern America. There was a financial meltdown, runaway government spending and a constituency fed up with aristocratic fiscal shenanigans.
Minus the heads on pikes (give it a year), the situation is eerily similar to today.
Whether it is on the federal, state or local level, government ineptitude is at all-time highs throughout the country. The powers that be want our guns, our freedom and most importantly, our money.
Whether they know it or not, the nation’s most populous states are on a fast-track to bankruptcy. California gets the most press time, but big-hitters like New York, Pennsylvania and Maryland deserve just as much space on the front page.
There is big trouble brewing.
At home in Pennsylvania, our governor took time last week, not to wish the state a Merry Christmas (that would be hell on poll numbers), but to warn us the state’s financial future looks very, very bleak.
Governor Rendell tells us once Obama’s stimulus money runs dry in the next year or so, funding for the programs that keep the state moving forward will dry up. Unless new revenue sources are created, upcoming budgets will have more holes in them than O. J. Simpson’s murder defense.
What’s his answer? Gambling and blackmail. What else would you expect from the raspy talker from Philadelphia?
Pennsylvania’s governor is using the state’s workers as pawns in a high-stake chess match with the legislators in Harrisburg. Last week, he set out a January 8 deadline to get a tax-heavy gambling bill passed.
If the state’s congress does not legalize table games by that date, another 1,000 workers get the axe.
How’s that for the aristocracy sticking it to the citizen?
*** If you have been watching the headlines, you know just about every cash-strapped state has plans of opening its borders to slot machines and gambling. It’s a great way to shake out the pockets of citizens without imposing a new tax.
It’s still stealing. But it is a much more sinister way of doing it.
Beyond gambling, legislators have their eye on an even bigger tax source… the Internet.
Right now, the World Wide Web is a veritable tax haven for shoppers. Sure, a few shoppers here and there are forced to pay state sales tax, but if you want to save the extra 5% to 10% you’d pay at a brick-and-mortar joint, just a few clicks will get the job done.
Of course, state governments do not like the idea. Billions of dollars in taxable sales are crossing state borders, yet very little of it is getting taxed. Even when the law states web-purchased goods are supposed to be taxed, the vast majority are not.
As of now, Internet tax laws are virtually impossible to enforce and large retailers are getting better and better at taking advantage of the many loopholes.
But that will change. You can count on it.
As state governments run out of easy revenue sources, they will turn to the Internet. Over the next twelve months, we will see an increasing amount of legislation aimed at getting more of your money out of your wallet and into their hands.
Even scarier, on November 1, 2014, the Internet Tax Freedom Act is set to expire. If not renewed, Web-vitals like email access and bandwidth could be opened up to federal and state taxes. Taxing these entities souned preposterous when the law was created in 1998, but now that Uncle Sam is in debt like never before, you can count on Washington getting its greedy hands on this one.
Soon, the Internet will no longer be a tax-free zone. It is not good news for investors. It’s not good news for shoppers. And it certainly is not good news for the American economy.
*** Let’s talk gold. After early-morning gains, the precious metal just hit negative territory once again. With gold now trading for $1,100 an ounce, its speculative value is dwindling, but its attractiveness as a long-term store of security is rising.
As noted above, there is no doubt taxes will be on the rise in coming years. Estate taxes, short- and long-term capital gains and just about anything related to real wealth will be eyed by a greedy, desperate government.
While they will do their best to shave a few pieces off your bullion, gold is a great way to protect yourself from a government gone mad. Now that prices have come down out of sky-high territory, now is a good time to grab some gold, stash it in the basement and walk away.
But don’t go too far. You may need the shiny metal sooner than you think.
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