2 percent tax hike has workers finding less in their paychecks - Boston News, Weather, Sports | FOX 25 | MyFoxBoston

2 percent tax hike has workers finding less in their paychecks

Posted: Updated:

By Robin Schwartz & Murray Feldman
Fox 2 News


ROYAL OAK, Mich. (WJBK) -- "I found out my check was about $20 bucks shorter than it usually is," said forklift driver Donnovan Kennedy.

Welcome to 2013.  An estimated 160 million workers found less in their paychecks Friday, and it will stay that way thanks to one federal tax that's back in full force.

"The payroll tax's that's always been there.  It's been 6.2 percent and it goes into Social Security and Medicare.  It's what you see on your paycheck as FICA," said LJPR Chief Investment Officer Brad Reynolds.

Two years ago, that tax was cut by two percent, but the so-called holiday has now expired.  Lawmakers let it happen when they worked out the fiscal cliff deal.

"In a sense they did raise taxes on the middle class, even though it's only two percent," Reynolds said.  "Who do you blame?  Blame government, I mean honestly both sides.  They came to the agreement."

Economists estimate this two percent tax hike could strip $115 million in disposable income from the economy this year, and that could hurt small businesses as people shop less.

"Go to work everyday, work hard.  I need all the money I can get," said Kennedy.  "There's always stuff you can cut back on.  I just have to decide what I want to cut back on."

Workers who make $20,000 to $30,000 a year will take home about $300 less this year.  Those who make $100,000 will fell a $2,000 tax crunch.

"You know, $10, $5 here after a year it adds up.  It could be somebody's rent, somebody's car payment, somebody's insurance, something to help the kids.  It's just not right," said Lauren Greenfield.

She works at a local restaurant and said every dollar counts in her budget.  The new, smaller paychecks will have many families rethinking their spending to start the year.

So how can you save $20 a week or more depending on your income?

Experts say you need a budget.  Carry a pencil and paper with you for a week and jot down everything you spend.  You'll probably be surprised.  Then create a budget.

If you buy lunch everyday, brown bag it.  You'll save up to $15 a week.

Call your cable company and ask for a better deal.  They may have one.

You can also sell some of the gift cards that are laying around the house.  The website GiftCardGranny.com may be helpful.

  • Robin SchwartzRobin SchwartzMore>>

  • Michigan nurse's story of fighting Ebola on the frontlines

    Michigan nurse's story of fighting Ebola on the frontlines

    Wednesday, September 17 2014 12:21 AM EDT2014-09-17 04:21:51 GMT
    Kelly Sites is back from Africa following her emotional and dangerous journey. Sites is a wife and a mother of twin teenagers, a boy and a girl, but she's willing to leave her life and everything she knows at a moment's notice and put herself in harm's way - to help people in need.
    Kelly Sites is back from Africa following her emotional and dangerous journey. Sites is a wife and a mother of twin teenagers, a boy and a girl, but she's willing to leave her life and everything she knows at a moment's notice and put herself in harm's way - to help people in need.
  • Hazel Park man who lied about assault charged with home invasion

    Hazel Park man who lied about assault charged with home invasion

    Tuesday, September 16 2014 1:24 AM EDT2014-09-16 05:24:41 GMT
    Holloway said he was jumped by a group of guys over a cigarette. But the story unraveled and Holloway was lying. A woman who saw the story said that Holloway broke into her home and was caught by her boyfriend who delivered the beating.
    Holloway said he was jumped by a group of guys over a cigarette. But the story unraveled and Holloway was lying. A woman who saw the story said that Holloway broke into her home and was caught by her boyfriend who delivered the beating.
  • 2 men killed after one sets the other on fire

    2 men killed after one sets the other on fire

    Friday, September 12 2014 8:47 PM EDT2014-09-13 00:47:07 GMT
    Detroit Police tell us that two men were killed Friday morning at a home on Springwells street in southwest Detroit after an apparent domestic turned deadly.
    Detroit Police tell us that two men were killed Friday morning at a home on Springwells street in southwest Detroit after an apparent domestic turned deadly.
Powered by WorldNow

25 FOX Drive
Dedham, MA 02026

Phone (781) 467-2525

Didn't find what you were looking for?
All content © Copyright 2000 - 2014 Fox Television Stations, Inc. and Worldnow. All Rights Reserved.
Privacy Policy | New Terms of Service What's new | Ad Choices