Fox Business says April 30, 2009, commenting on the government's putative conversion of $95B in preferred stakes in Bank of America and Citigroup to common shares:
"Do any of you agree that all of this government borrowing will vacuum up any spare private capital out of the markets and could drive 10-year treasury yields higher, causing mortgage rates to rise and sheer bedlam at the Federal Reserve, which has been blowing out its balance sheet, buying Treasurys (sic) to keep mortgage rates low?"
"And that our taxes are going to have to rise to pay for all this, right when inflation socks us because of the bailouts, now fast approaching the country’s entire GDP-as we struggle with a tax system that has a mass exodus of companies offshoring their profits because the code is a tangled barb wire of stupidity?"
Many states have already announced increases in state income taxes.
- Structured settlements are income tax free if the periodic payments represent damages for physical injury or physical sickness, or workers compensation (see IRC 104(a)(1) and 104(a)(2).
- Tax deferral on non qualified cases as well as structured attorney fees are given a boost by the tax increases
- The potential for rising inflation may require a multiple product solution.
- Existing structured settlement recipients will, at least temporarily, have an increase in the intrinsic value of their structured settlements because of the tax increases without doing anything.