Hey America, how’s that hopey-changey Obama payroll tax increase treating ya?
America, so you thought that Barack Obama and Democrats were just looking to raise taxes on the rich, eh? This past Friday when you received your pay check you realized otherwise. So many jealous and envious people were so caught up in Obama’s class warfare in taxing and punishing the so-called rich with a tax increase that they did not even consider that Obama was going to raise taxes on them too. Don’t say you were not warned.
Obama is laughing at the fact he was able to divert the attention of Americans away from the Obama payroll tax increase
As reported at Yahoo.com, say hello to the Obama payroll tax hike and goodbye to your hard earned money to the government. According to the Tax Policy Center, about 160 million workers pay this expired payroll tax that President Barack Obama cared little to extend during a terrible economic down turn. The increase will cost the average worker about $700 a year. The joke of a fiscal cliff bill contained no provisions to help the middle class avoid this 2% tax increase.
Americans are beginning to feel the pinch from Washington’s decision to embrace austerity measures aimed at bringing down the nation’s budget deficit.
Paychecks across the country have shrunk over the last week due to higher federal tax rates, and workers are already cutting back on spending, which will drag on the economy this year.
In Warren, Rhode Island, Ben DeCastro got his first paycheck on Friday in which taxes on his wages rose by 2 percentage points. That works out to about $30 a week.
“You sit back and do the calculation, and that’s $30 I’m not going to spend at a restaurant,” said DeCastro.
He said he worries that people hit by higher taxes will spend less at the chain of furniture stores where he works as a marketing manager.
Economists estimate the payroll tax hike will reduce household incomes by a collective $125 billion this year. Some households could reduce contributions to retirement accounts or other savings, but most are also expected to cut back on spending.
That alone could reduce economic growth this year by about 0.6 percentage point, said Michael Feroli, an economist at JPMorgan in New York City.
“The headwind to growth should be noticeable,” he said.