Smaller Paychecks Despite "Fiscal Cliff" Deal - Valley News Live - KVLY/KXJB - Fargo/Grand Forks

Smaller Paychecks Despite "Fiscal Cliff" Deal

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The short-term compromise that passed late Tuesday night to avoid the immediate impacts of the so-called "fiscal cliff" only sets up much bigger battles in the coming months for Americans.

In a late-night vote, the House passed the "fiscal cliff" compromise bill from the Senate. Many say it was slow and ugly, but in the end Congress did go bipartisan.

The legislation is now headed to the White House to be signed by President Obama.

The bill levees higher taxes on upper income Americans, but many, in both parties, remain frustrated that the "fiscal cliff" deal does not cut the deficit.

While many effects of the "fiscal cliff" were averted, you may think your taxes are not going up. Unfortunately, that is not entirely true. Your paychecks will still be taking a hit.

Some like Human Resources Manager Matt Heinzen not only have to worry about the paychecks of nearly 400 employees but also the paychecks for his own family.

Heinzen asks, "How am I going to ensure that my family and I can still live the means we want to?" This is especially true since he and his wife just added a new baby to the family.

That variable tied with a new one, a two percent increase in Social Security taxes for each pay stub thanks to the end of a payroll tax cut January 1, could make things a little tight for Heinzen.

He says, "Adding a new baby to the family is great stress. But having to figure out what we're going to do with a thousand dollars less than we had the year before, is not the stress somebody would like."

So what does this all break down to? What does it all mean for you?

If you are making $50,000 a year, you will be paying an extra $1000 in taxes. If you are making $30,000 a year, you will be paying $600 in taxes.

But still what does that mean?

Say you are paying that $600 extra a year in taxes. That breaks down to about $50 per month. That money could be part of your utility bill, a tank of gas or even what you buy at the grocery store.

Heinzen says he and his wife have already changed some things by not buying brand name items. They might also have to hold off a yearly vacation.

It is frustrating to him. He says, "This is something they could've solved, probably back on November 8."

Heinzen says it has all been one big publicity stunt that has given the president and senators great air time. He says instead the government should be doing what is right for the people.

The extra taxes start immediately. You will see less money in your paycheck the first time you get paid in 2013.

Washington will take a breath for now but there are other fights coming. In fact, it will be just a matter of weeks before they fight over the debt ceiling, raising the country's ability to borrow, and there will be another budget showdown, probably in March.

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