By Jim Chiswell
Just a word of caution about what could happen on Jan. 1, 2013. Lets assume the whole Mayan Calendar ending has another meaning other than the end for all of us and we make it to the New Year. Unless our dysfunctional Congress gets its act together over the next few months, which I doubt, average American families are headed toward a sweeping tax increase estimated at $3,800 next year.
If Congress and the President fail to act, $500 billion in current tax breaks expire. These tax increases will hit literally everyone. The Marriage Penalty returns, and 34 million households will probably be hit by the Alternative Minimum Tax. The Payroll Tax deduction will be eliminated. The Child Tax Credit will be cut by 50 percent, and the taxes on dividends will jump from 15 percent to as high as 39.6 percent. And there are others.
I know the media is telling us that were out of the recession, but I still have friends without jobs and keep seeing signs saying this house For Sale by XYZ Bank that foreclosed on some poor family. This tax mess could set this country back a decade.
I predict self-storage industry could take a bit of a hit as families have to tighten their belts and budgets even further to make up for what Washington will start taking back because theyre so much better at spending our money on their priorities than our necessities.
I mention this now not as a political statement, but as a heads up as youre making financial decisions for the balance of the year. You may want to take into consideration this possible doomsday scenario. It also means considering putting a little something in the mattress to offset digging deeper in your pocket to pay Uncle Sam next year. Sure hope Im wrong about this!
Jim Chiswell is an industry veteran and owner of Chiswell & Associates LLC. Since 1990, his firm has provided feasibility studies, acquisition due diligence, mentoring and customized manager training for the self-storage industry. He has served for a number of years on the Inside Self-Storage Editorial Advisory Board, is a moderator on the SelfStorageTalk.com interactive online community and is faculty member of the Self-Storage Training Institute. He can be reached at [email protected] or www.selfstorageconsulting.com.