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Taxes will still increase even though fiscal cliff deal made

Taxes will still increase even though fiscal cliff deal made

POSTED: Wednesday, January 2, 2013 - 6:30pm

UPDATED: Wednesday, January 2, 2013 - 6:34pm

Even though Congress has come to an agreement on the new bill that avoided the fiscal cliff, most households will still be hit each month.

The bill extends tax cuts for everyone except individuals making $400,000 a year or more.

However, the two percent payroll tax cut is gone, so expect to see that hit your paycheck starting this month.

Even though that two percent is not a huge amount, local economists say it will play a big part in the progress of our economy.

"The main thing is you are going to see a slower-going national economy,” stated economist Loren Scott. It’s the principals of economics - you raise tax rates, you will see the economy start to slow. I think if you are unemployed, the possibility of you getting a job is reduced even further."

The bill does extend long-term unemployment benefits that were set to expire. The measure heads to President Obama, who has promised to sign it.

  

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