Updated: Oct 15, 2020
First, let me say that while I have my own political leanings, this isn't going to be a "conservative vs liberal" or "left vs right" bashing. This applies to all parties and political agendas.
I only want to talk about two areas that significantly affect all Americans: Social Security and Healthcare. Social Security was originally promised to NEVER be taxed. This was done by a series of rulings early in the Social Security program. (This is now classified as a 'myth' because the Reagan administration changed it. Yes, Reagan.) Here is the link: https://www.ssa.gov/history/InternetMyths.html
Myth 5: President Roosevelt promised that the annuity payments to the retirees would never be taxed as income
Originally, Social Security benefits were not taxable income. This was not, however, a provision of the law, nor anything that President Roosevelt did or could have "promised." It was the result of a series of administrative rulings issued by the Treasury Department in the early years of the program. (The Treasury rulings can be found elsewhere on our website.)
In 1983 Congress changed the law by specifically authorizing the taxation of Social Security benefits. This was part of the 1983 Amendments, and this law overrode the earlier administrative rulings from the Treasury Department. (A detailed explanation of the 1983 Amendments can be found elsewhere on our website.)
And who was president of the United States in 1983? Ronald Reagan. Did George H.W. Bush or Bill Clinton campaign on repealing this? Has ANYONE on either political party EVER campaigned to repeal that particular tax law? No. And they never will.
Note that income limits that trigger Social Security taxation have never been indexed to inflation, so as inflation continues... more and more people will be paying taxes on their Social Security. This is by design.
Inflation can literally make our money feel like Monopoly money the more the Federal Reserve prints more money for our banking reserves:
Okay, so now I've satisfied the political satisfactions of those who lean toward the liberal or 'left' side of the political spectrum. And just to even it out: We can talk about the Affordable Care Act or 'ObamaCare' and that "If you like your plan, you can keep your plan. And if you like your doctor, you can keep your doctor." That certainly didn't go according to THAT campaign promise. So, what does this have to do with anything?
The bottom line of Government: Anything the government grants... can be taken away, all based on how they view "success" according to the tax code... and they will change that definition based on their "needs".
Government promises are only as good as the current administration's commitment to keeping them... NOT the political party that is in power.
What about Trump?
Trump enacted a tax cut plan in 2018. Yes, the brackets were lowered by about 20%, but certain itemized deductions were removed:
Deduction of Property Taxes
Home Equity 2nd Mortgage Interest (home mortgage interest deduction now only limited to home acquisition costs, not leveraging your home equity)
Federal deduction of State Income Taxes limited to $10,000
But let me ask you this: Will these deductions be restored in the future? Nope. Never will. Why not? Because as the American public gets accustomed to certain things in the law, what's Congress's motivation to restore things back to the way they were? There is no motivation. Politicians will simply say "Only rich people itemize."
So... will taxes go up without restoring past itemized deductions? The answer is very simply 'yes'. We just won't know who we're going to blame yet. We've passed $23 TRILLION dollars in total national debt as of November 8th, 2019.
The government has an appetite for taxes. Does it make sense for you to place your long-term retirement savings at the mercy of the Government to decide how successful you are and tax you according to that success?
But they won't increase taxes fast! The government will slowly remove deductions and credits... and slowly increase the brackets over time. Once you see the pattern, you can't NOT see the pattern.
Just one message from our "Retirement Planning Partner":
Yes, I believe in paying our fair share. Taxes are how we feed the goose that lays the golden eggs of freedom and opportunity in America.
But if we aren't careful, we can be taxed OVER AND OVER again, simply by not realizing the nature of the partner we chose to partner with for our long-term retirement security.
There IS an exit strategy that has been in the tax code for 106 years, for those who want far greater control over your wealth and reduce or even eliminate such Government overreach into your financial affairs.