Less Money to Spend around Sioux Falls. Payroll Tax is Going Up!
Here we are hopefully getting our 1st paychecks of 2013. Check them out and you'll notice that the government is now taking even more money out. Like they weren't taking enough out already!? According to finance.yahoo.com this is why:
American workers are opening their first paychecks of the year and finding an unpleasant surprise: The government's take has gone up. A temporary cut in Social Security withholdings gave Americans hundreds of extra dollars to spend over the past two years. But Congress allowed that break to expire during the wrangling over the fiscal cliff, meaning that Social Security taxes have reverted to 6.2% of salary from the temporary 4.2%. The noticeable lightening of paychecks as consumers remain tentative threatens to put a drag on economic growth. The effect for companies is that the hit is likely to cement a frugal attitude that led consumers to cut back on eating out and shift to less-expensive store brands. Kari Barker, an accountant in Salt Lake City, recently received her first 2013 paycheck and realized that she and her husband will take home $250 less every month. Roberton Williams, a tax economist and the Sol Price Fellow at the Tax Policy Center in Washington, said the expiration of the payroll-tax cut will leave the average American household with $18 to $20 less to spend each week, or $900 to $1,000 a year.
In these economic times it's tough enough finding the extra cash for a night out to a show at the Washington Pavilion, a quiet dinner at Bracco, or perhaps a little shopping at Dawley Farm. Now we are going to have even less money to stimulate the local economy. Will this tax increase cause you to cut back even further on your social spending? It drives me nuts.