Fiscal cliff tax increase

WTNH TV

Updated: Jan 2, 2013 6:57 PM

HARTFORD, Conn. (WTNH) -- The U.S. House gave final approval late last night to a bill that avoids the so-called 'fiscal cliff" but you will find your own tax hike 'cliff' in your next paycheck.

Big headlines say taxes are only going up on people that make over 400 thousand dollars but that is not really true.

"Thanks to the votes of Democrats and Republicans in Congress, I will sign a law that raises taxes on the wealthiest 2 percent of Americans while preventing a middle-class tax hike that could have sent the economy back into recession," said President Obama.

"Do you make less than 400 thousand dollars a year," asked News 8's Mark Davis.

"Yes," said Tae Namkoong of Avon.

"With the deal that the President is signing, do you think your taxes are going to stay the same? Go up? Or go down," asked News 8's Davis.

"Hopefully go down," said Namkoong.

Sorry Tae, no chance.

"Can you tell me if you make less than 400 thousand dollars a year," asked News 8's Davis.

"Yes, I do," said Dave Geyer of Hebron.

"Do you think your taxes are going to go up? Go down? Or stay the same," asked News 8's Davis.

"Well, I know that I will have less in my take home paycheck," said Geyer.

"Do you make less than 400 thousand dollars a year," asked News 8's Davis.

"Yes, I do," said Ann Follacchio of Farmington.

"Do you think your taxes are going to go up? Go down? Or stay the same," asked News 8's Davis.

"They're going to go up," said Follacchio.

Ann and Dave are correct.     

What was unsaid here last night is the fact that about 80 percent of all Americans, basically everyone that is working will see another tax go up starting with the very first paycheck of the new year.

That's because the temporary cut in the Payroll Tax, the one that funds Social Security has expired.

For those earning 110 thousand dollars a year, the tax hike is about 22-hundred dollars, about 42 dollars per week or 85 dollars per paycheck if you get paid every two weeks.

If you make about 50 thousand dollars a year, the payroll tax hike is one thousand dollars, about 20 dollars a week or 40 dollars per paycheck.

Even if you only make about 20 thousand dollars a year, your payroll tax goes up 400 dollars, about 8 dollars a week or 15 dollars per paycheck.

But several members of Congress, including Senator Dick Blumenthal are pushing to bring back the 'Making Work Pay' income tax credit that expired last year.

That would be about the same amount and would allow that money to continue flowing into people's hands and into the economy.

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