HATTIESBURG, MS (WDAM) -
Americans
may be breathing a deep sigh of relief after a bill to avert a fiscal cliff was
approved Tuesday night – until they see their next pay stub.
By
averting the fiscal cliff lawmakers raised income taxes on the wealthy, but in
this deal everyone's taking a hit.
Social
Security payroll taxes are going up for all American workers.
"When
you get your paycheck you're going to notice that you have less money to bring
home each week from that paycheck," said owner of Holland's Tax Service Cynthia
Holland.
Payroll
taxes rose to 6.2% under the deal from 4.2% last year.
"If
you're an average household in Mississippi making $35,000 that means those
families are going to bring home $700 a year less to spend in their household,"
said Holland. "If you're making $70,000 that's going to put it up to around
$1,400 less for those average households, so that's the biggest affect that's
going to hit our people here in Mississippi."
Along
with the payroll tax cut also come the income tax rates.
"The
biggest effect is going to be the people making over $400,000 a year, couples
$450,000, those are the people that's going to be mostly affected by this,"
said Holland. "Their tax rate is at 35% now, it's going to put their tax rate
up to 39.6, so they're going to be paying a lot more in taxes."
The
bill passed by the House and Senate also extends most of the Bush-era tax cuts
for individuals making less than $400,000 a year and married couples making
less than $450,000 a year.
"Those
were the ones that was most important to a lot of our people here in
Mississippi," said Holland. "They're still going to get their child tax credit,
they're still going to get their earned income credit."
Though
the bill will protect 99% of Americans from and income tax increase, most of
them will still end up paying more federal taxes in 2013.
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© (Source:CNN)
