I encourage every American, and especially those on fixed incomes, to watch your financial situation very diligently and make preparations for that situation to erode significantly during the next year or two. While careful management of one's finances is always wise, I think it will be critical in the near future due to the following:
1. 2025 is the year for the reassessment process of property in Hamilton County. This fact was confirmed to me in early January by a Hamilton County commissioner. These reassessments will likely show dramatic increases in property values. While on the surface, this increase seems to be beneficial to the property owner, the reality is that the result will be higher property taxes. While the certified tax rate law limits the amount of new revenue that a county can generate from reassessments, there is great likelihood that counties and local municipalities will increase their tax rates as soon as possible after the certified tax rate law limits expire. There may also be ways to skirt around this limitation. If so, you can depend on the municipalities to find them.
2. The state of Tennessee passed a new act authorizing vouchers for private schools to be paid from taxpayer funds with apparently very high income limits, and, if I understand the act, no income limits on some vouchers. These weak limits on eligibility will enable wealthy politicians to send their children to private schools on public money. These vouchers will very likely encourage many people to leave public schools which will then affect funding for those public schools. Expect a sales tax increase (if not an income tax in Tennessee) to pay for these vouchers and other poorly considered state spending.
3. The Musk/Trump/Vance axis of power has recently begun to enact tariffs on goods from some countries. Several sources have indicated that these tariffs will result in quick increases in the prices of some consumer goods, most of which will be borne by the middle-income taxpayer. For example, Goldman-Sachs, the investment firm, has predicted that tariffs will result in "increased prices" and the Peterson Institute for International Economics has stated that it believes that "collateral damage" to the economy will result from these ill-conceived tariffs. Expect to pay higher prices and receive less in return in the very near future.
4. The ill-conceived Project 2025 proposes to increase the Social Security eligibility age from 67 to 69, which will likely result in a reduction of benefits to recipients and certainly will require people to work longer to receive benefits. The Republican Study Committee released its 2025 budget proposal last March; that proposal included cuts to Social Security. Although Trump has stated during his campaign that he would "protect" Social Security, his record of lying undermines that idea. I suspect that Social Security recipients will see our benefits decline in the next two to four years. Trump also rescinded one provision of Medicare that placed a cap on some Medicare prescriptions.
The policy of politicians at every level and of every party, seems to be that the American taxpayer (particularly the middle class taxpayer) is a fat cash cow to be milked dry at every opportunity, to use a bovine metaphor. Thus, it is becoming more and more imperative that every taxpayer protect his or her financial position carefully. I plan to return to the workforce soon, although I, at age 73, should not have to do that in one of the wealthiest countries on earth. I am not dependent on Social Security; however, I have to protect my financial well-being from those who would endanger it and earning more money is one way to do that.
The Book of Proverbs, chapter 22, verse 3 reads, "The prudent person foresees danger and takes precautions. The simpleton goes blindly on and suffers the consequences." From my perspective, a huge danger comes in the form of greedy, unscrupulous politicians and we need to be prepared for them.
Tim McDonald