Wondering Why Your Paycheck Shrunk?
If you want to know why your paycheck shrunk–ask Congress and President Obama.
Many hardworking Floridians are surprised and disappointed to learn that their paychecks are smaller because President Obama and Congress decided to raise their payroll taxes and take more out of their hard-earned pay. Lost in the dramatic debates in Washington on the fiscal cliff was the expiration of a payroll tax reduction. While Congress talked about the so-called fiscal cliff, they allowed a 2 percent payroll tax hike to move forward.
Over $1 billion was spent in 2012 by candidates making promises to lower taxes on working Americans. Well, guess which one of the first things President Obama and Congress did in 2013? That’s right. They passed a $112 billion tax hike on virtually every job in the United States.
This payroll tax hike means families will have to spend less and save less which could shatter the already fragile road to economic recovery. The average American’s salary increased 2.4 percent last year but the new payroll tax hike is wiping almost all of that out at a time when the economy cannot afford it.
This tax increase will have a major impact in Florida. Although wages are increasing in Florida, so are the prices of goods and services. The average Floridian earns around $44,000. The new payroll tax hike ensures that the average family will pay an extra $880 in federal taxes.
With many small businesses and job creators relying on consumer spending in 2013, this tax hike will impact economic growth. Economists predict the tax increase on working Americans will cost the economy .5 percent and 1 percent and slow our national economic recovery.
By not extending the tax reduction, Washington continues to stand in the way of growth and job creation. After the fiscal cliff debate, it was tough for Washington’s credibility on the economy to sink any lower. But, unless something drastic happens, that’s exactly what will happen in 2013.
While the fiscal cliff debate is other, other challenges loom. Congress and the White House deferred the looming sequestration of $500 billion in defense spending for two months as one of the results of the fiscal cliff agreement. Unless Washington does something about the pending defense sequestration, high-skill and high-wage jobs in Florida and across the nation will be in danger as the cuts will severely impact military defense contractors including Florida job creators like Boeing, Harris, Lockheed Martin and others.
According to a report from the Florida Chamber Foundation, higher taxes combined with major government spending cuts would likely have resulted in an economic recession beginning in early 2013. With the current administration pushing for more revenue to match spending cuts, there is a risk of future tax hikes. This will ultimately mean fewer resources for American families and businesses–and more money in the hands of a growing government.
The Florida Chamber is concerned about the fiscal insanity. The fiscal cliff is far from over and Americans have questions that still must be answered. The U.S. is still the world’s largest economy, but with a $16 trillion national debt that continues to grow, we must fix the debt now!
As we look to secure Florida’s future, the Florida Chamber will continue to provide updates on what’s happening in Washington. This ill-timed payroll tax on Americans will be the tip of the iceberg. Free enterprise, combined with a smaller government and a smart regulatory tax and litigation climate, is the best way to improve competitiveness and return America on a path to prosperity.
So, now you know why your paycheck shrunk and I hope you will speak up so the voice of reason in America wins again.
WANT TO TAKE ACTION?
Contact your member of the U.S. House and Florida’s two U.S. Senators, Bill Nelson and Marco Rubio, and tell them to end the threats to Florida’s and America’s economy now!