I am insecure about spending money and whether money belongs to me. If I was to earn £1 million tomorrow I would not feel secure enough to spend a penny because the government will look for ways to take it away from me. I am even worried that they will take things I have already paid tax on away or charge me a tax for holding it. This poses quite a problem in my opinion especially at the moment because the government is making a grab for anything and you don't know how much you have to pay. So if you pay tax you will have a tax bill at the end of the year it is impossible to know how much you available to spend. I have a degree in accounting and finance so I know more on this subject than most people, the more I know the more I am scared. Governments take more in a recession and chase people, so I know they will try to get money they cannot. The only way out of even the most unfair or illegal tax charge is a gruelling fight often legal with the inland revenue, which we all want to avoid. I just want to know if any one else feels this way and whether you think this has a dampening effect on the economy. Does this fear of spending due to the uncertainty of wealth as a result of tax payments not being know put you off.
No you are missing my point. You could abide by the law perfectly and they will still take money from you. I have seen it happen, people go to a tax advisor and they get the tax paid then the inland revenue contest it. There have even been cases where they have changed the tax then back dated it. This happened in England with certain types of sole traders and trusts were changed too. In effect the boundaries are changed and you end up having to pay more than said. Trusts that were tax havens were set up for inheritance amongst other things. They existed for years with the tax exemption but then the law changed and they became in many cases worthless. Perhaps it is different in the US but that will change with Obama. Perhaps you should look at the UK and get a feeling of what is likely to happen.
I am afraid to spend because I want to make sure I have enough money for when I am old. If I was only worried about the government taking it, then I would spend it all now and fast before they could get their hands on it.
Nothing wrong with those sentiments. There is uncertainty and so many increase their cash reserves, pay down debt etc. Totally understandable. I kind of admire people who are able to throttle back according to conditions. Cheapness is kinda cool. A friend of mine that we all regarded as a tight wad recently bought a 50-ft yacht and has started entertaining all of us with trips up around the San Juans and up into Canada. He turned out to be very generous its just that when we were all trying to make a buck he was a bit more careful. Now he is enjoying the fruits of his thrift and its an awesome sight. I could use a new washer and dryer in the guest house. I would love a fancy new set of front-loaders with steam and all the goodies. Given the conditions I think I'll just keep using the avocado-green washer/dryer set that I have from circa 1975. When it fails the parts are usually available at Lowes and I just keep fixing them. I'll probably use them until they can't be repaired. Its not just about money, its about karma too.
US tax policies have made some things retroactive to a prior date. The Revenooers can do virtually any frickin' thing they want! The concepts of "fair" and "reasonable" have no place in their vocab.
Nothing wrong with those sentiments. There is uncertainty and so many increase their cash reserves, pay down debt etc. Totally understandable. I kind of admire people who are able to throttle back according to conditions. Cheapness is kinda cool. A friend of mine that we all regarded as a tight wad recently bought a 50-ft yacht and has started entertaining all of us with trips up around the San Juans and up into Canada. ----------------- I agree. More importantly, helping to ease insecurity maybe tht might be one reason this guy bought a boat, indulge in a pleasure, change your frame of mind. Money is a tool. If you're afraid to spend money (as I am also) and I am cutting back, holding off but where I do spend money is still preparing for what may be a worse economic situation.