More On Tax Planningfrom The Advisor's Professional Library
- IRAs: Eligibility The eligibility rules for contributing to traditional and Roth IRAs are complicated. Learn how to effectively use them in retirement plans.
- Health Insurance: Health and Medical Savings Accounts A Health Savings Account is a trust created exclusively for the purpose of paying qualified medical expenses of an account beneficiary. Although they are popular, they are not without their pitfalls and the regulations can be complicated. Learn more about how to avoid federal taxation on the accumulation and distributions of HSA.
Former Federal Reserve Chief Alan Greenspan has switched sides. Long against tax increases, he has come to the conclusion that the Bush-era tax cuts--all of them--should be allowed to expire. He believes it is necessary both to exercise some restraint on the deficit and also to keep private investment from being crowded out, according to a story reported Wednesday by Reuters.
Calling the choice between raising taxes and not doing so "terrible" and "worse," Greenspan, who had supported the Bush tax cuts in 2001 and 2003, now says that allowing the deficit to expand is the "worst" choice, and it is better to raise taxes--even though he still believes in lower taxes--"but only in the context of bringing the deficit down."
"I am in favor for the first time in my memory of raising taxes," he said in an address at the Council on Foreign Relations in New York on Wednesday. He warned that the budget deficit was getting in the way of capital investment.
Held by some to be partially responsible for the housing bubble because of his monetary policies in the early 2000s, he was named No. 3 on Time magazine's list of people responsiblefor the financial crisis.