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What Would You Do with $384?

Posted by Jamie Downey  May 26, 2009 08:17 AM

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The ability for individuals to generate wealth hinges on their ability to save money as well as earn a decent return on that investment. Most financial advisors believe that saving ten percent per year should be adequate to create long term wealth and a comfortable retirement. The Massachusetts Senate last week passed a bill which will make it more difficult for individuals to execute that plan. The bill will increase taxes by $1.003 billion on residents of the state, which in turn will drain the financial coffers a little more from all of us residents.

A $1 billion dollar tax increase will increase taxes on the average Massachusetts household by $384 (approximately 2.6 million households). If you did not think the average $9,023 that your household was already paying in taxes to the state of Massachusetts was significant (source: Taxpayer Foundation), it will be increasing by 4.3 percent. These numbers do not include local real estate taxes.

There are a whole lot of things that I would like to use that $384 dollars on including: funding my daughter’s 529 plan, funding my 401(k) plan (unfortunately I will not be graced with a pension in my late 40’s), paying about four months of my electric bill, paying my water bill for the year, or making a car payment. Apparently the Massachusetts Senate and House think they can spend it more wisely – and have a veto proof majority to prove it.

This blog is not written or edited by Boston.com or the Boston Globe.
The author is solely responsible for the content.

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ABOUT MANAGING YOUR MONEY
Local finance professionals share insights and advice on issues such as budgeting, managing debt, and retirement planning.

About the contributors

D. Abraham Ringer is a CERTIFIED FINANCIAL PLANNER practitioner and a Financial Adviser with Morgan Stanley Global Wealth Management in Boston. He is registered in MA, NH, NY and several other states to which his articles are directed. For more information please visit www.morganstanleyfa.com/ringer
Financial Planning Association™ of Massachusetts has 900 members who specialize in the financial planning process. Many of its members engage in philanthropic pro bono work in their communities, recommend legislation, elevate public awareness, promote financial literacy, and advocate for sound economic and tax policies.
Odysseas Papadimitriou is the founder of CardHub.com, a credit card and gift card marketplace, and WalletHub.com, a personal finance site. He has more than 13 years of experience in the personal finance industry, and previously served as senior director at Capital One.

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