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Even though Congress reached a fiscal cliff deal, we're going to see more money coming out of our pockets

4:46 PM, Jan 2, 2013   |    comments
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Tampa, Florida - Even though a fiscal cliff deal has been reached, we're going to see more money coming out of our pockets.

The deal that was passed by Congress protects from an income tax increase. But federal taxes will increase for most Americans. With the payroll tax coming back, that is going to hit everybody that works.

When you get your first payroll check this year, you'll see how the fiscal cliff fiasco affected you.

The deal passed late Tuesday did nothing to prevent a temporary reduction in the Social Security payroll tax from expiring, meaning an additional 2% tax on your gross earnings.

"When you take the average family making $40,000 or $50,000 a year, 2% of $50,000... that's $1,000. You take that out after the normal taxes, with what they're left with. That's $1,000 coming out of their pocket," says Bob Fisher, President and CEO of Grow Financial.

The Tax Policy Center says households making between $40,000 and $50,000 will face an average federal tax increase of $579 in 2013. Those making between $50,000 and $75,000 will face an average federal tax increase of $822.

With 160,000 members, Fisher knows that everyone is going to be impacted. He says many people are living paycheck to paycheck and it's going to be very difficult on them. What that impact is long term, is still yet to be determined.

"I don't think this is going to be the end of it. The debt situation still has to be solved and the money has to come from somewhere. So where is the government eventually going to go? They're eventually going to go to everybody."

The payroll tax, which funds Social Security, was first cut by 2% at the start of 2011 and then extended through 2012 . Public officials have said the tax cut was never meant to be permanent, and Fisher says he doesn't think Congress will bring it back.

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