The ability for individuals to generate wealth hinges on their ability to save money as well as earn a decent return on that investment. Most financial advisors believe that saving ten percent per year should be adequate to create long term wealth and a comfortable retirement. The Massachusetts Senate last week passed a bill which will make it more difficult for individuals to execute that plan. The bill will increase taxes by $1.003 billion on residents of the state, which in turn will drain the financial coffers a little more from all of us residents.
A $1 billion dollar tax increase will increase taxes on the average Massachusetts household by $384 (approximately 2.6 million households). If you did not think the average $9,023 that your household was already paying in taxes to the state of Massachusetts was significant (source: Taxpayer Foundation), it will be increasing by 4.3 percent. These numbers do not include local real estate taxes.
There are a whole lot of things that I would like to use that $384 dollars on including: funding my daughter’s 529 plan, funding my 401(k) plan (unfortunately I will not be graced with a pension in my late 40’s), paying about four months of my electric bill, paying my water bill for the year, or making a car payment. Apparently the Massachusetts Senate and House think they can spend it more wisely – and have a veto proof majority to prove it.
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