I’ve been hearing the same prediction for more than twenty years: taxes are going to be higher in the future. Clients say it. Other advisors say it. Even tax professionals say it. It’s become part of the background noise of financial conversations, a belief that feels sensible because it lines up with headlines about debt and deficits.
But when I step back and look at what has actually happened during those years, the pattern is different. Federal income tax rates haven’t been marching upward. If anything, they’ve been stable or lower. Yet the prediction keeps coming, year after year.
I don’t bring this up to argue that taxes will never rise. They probably will at some point. The challenge is that no one knows when, and predictions without timelines aren’t very useful in real planning. It becomes a bit like waiting for the stock market to “finally” crash after hearing warnings for years. Eventually it happens, but the warning itself doesn’t help you prepare.
Understanding this matters because these assumptions can quietly steer important financial decisions such as whether to make Traditional or Roth contributions, when to recognize income, how much flexibility to build into your retirement income plan, and how aggressively to pursue certain tax strategies. If you’re basing those choices on a prediction that hasn’t materialized, you may end up paying taxes at a time that isn’t ideal for your situation; or possibly steering your plan in a direction that doesn’t match your actual needs
I’ve often wondered why this belief has so much staying power. Maybe it feels logical. Maybe it reflects a broader sense that something must give. Whatever the reason, it’s a view that’s easy to repeat and hard to verify.
Tax policy will change over time. It always does. The key is to ground your plan in what you know today. Your income, your savings mix, your timeline; and staying adaptable as the facts evolve. That approach tends to produce better outcomes than acting on predictions that never quite arrive.