If you think things are expensive now, just wait until these new hikes kick in…
The latest inflation reading shows a new record high. It has only been getting more intense, than better. The latest policy moves seem likely to only throw even more gas on that fire, including your housing costs.
It seems that politicians and the Fed believe that the economy is still so strong that we can easily handle paying more in taxes and housing costs. That may certainly be true for a few. Though many are already struggling. Sooner or later that distress always makes its way through the economy and hits almost everyone.
So, what can you expect to cost more now? What should you do about it?
The New $739B Tax Hike
Senators Manchin and Schumer announced that they have struck a new deal on a spending package with a price tag of $739B.
The majority of this money is expected to be raised through more corporate taxes.
This comes at a time when even the biggest businesses have already been undergoing massive layoffs and hiring freezes. Even Ford recently joined this group. Perhaps another glimpse of a flashback to 2008.
In response businesses will have to raise prices to make up for shelling out more of their earnings in taxes. This may be especially painful for small businesses. If Walmart has acknowledged that consumers can no longer afford its clothing. Then what chances do small local companies have?
If you are a small business owner, and raising prices will just end up costing you the last of your customers, then you have to cut costs even further. Appealing the property taxes on your business property is one important way to do this.
Continued Interest Rate Hikes
The Fed raised interest rates again in July 2022, and says it plans to continue with more hikes.
This will increase the cost of your current debts, and the cost to buy things or borrow. As businesses pay more on their loans, they are again going to have to offset that with even higher prices. It is quite likely that this will show up in groceries, gas, homeowners insurance, property taxes, utilities, and HOA dues.
It is important to build this into your budget, right size finances now, and get in front of now before it is too late. Because once you can’t keep up, you could easily lose your home, car, furniture, and more.
There may be a lot of costs out of your control. Though you can potentially free up thousands of extra dollars each year by getting your property taxes reduced.