Fiscal Cliff Resolution to Take Large Chunk Out of American Paychecks

Now that a resolution in the fiscal cliff has been reached and the dust is starting to settle, Americans are waking up and feeling like maybe the government may have pulled the “okie doke” on them.

Before the deadline the sentiment was that if an agreement was made then all would be well. Both sides argued heavily for taxes on the rich to increase, which happened. Those making more than $400,000 will see their taxes increase almost instantly, but what slipped under the radar is the impact that the increase in payroll taxes will have on nearly 77 percent of the country.

Those making up to $113,700 will see their tax base increase from 4.2 percent to 6.2 percent. For a home making $50,000 annually, close to the national median for household income, taxes will increase to $1,000 a month.

These measures will have serious impacts for families trying to stay afloat or get ahead. Especially, since the Federal Reserve has stated that interest rates will remain low until unemployment gets back to an acceptable level and stays there, somewhere around 6.9 percent.

The wealthiest Americans will see a benefit from the estate tax. People inheriting less than $5 million won’t be assessed a tax. Initially, President Obama wanted the threshold to be $3.5 million.

Head over to the New York Times for more on the implications of the fiscal cliff resolution.