FIRST PERSON | The sentiment that swept across my Facebook feed as it was announced that we had "avoided" falling off the fiscal cliff was a generally joyous one indeed. Initially, my friends and colleagues seemed elated that the wealthy would have to pay more taxes. However, their joyous tones turned to crickets as we all learned more about the details of the Barack Obama-hailed bill.
President Obama even came out with a celebratory tone and stated, "Thanks to the votes of Democrats and Republicans in Congress I will sign a law that raises the taxes on the wealthiest Americans while preventing a middle-class tax hike." I was willing to put aside my personal feelings about the fact that the bill focused on generating new revenue through taxes while failing to address government expenditures.
Here in New Orleans, I tweeted the following to my 1,834 Twitter followers: "Bureaucratic red tape is eventually replaced by legislative duct tape…until the whole thing falls apart. #USProblems #DC'Solutions'"
I was in for an interesting surprise when I later read that part of the "solution" to the fiscal cliff crisis was a provision that would fail to renew the 2 percent payroll tax decrease that was passed to help working people handle the effects of the recession. It was at that point that I reverted back to President Barack Obama's applauding over the fact that the middle-class would not experience a tax hike. I was perplexed. I am a working American and will have to give an extra 2 percent from my paycheck to the government yet he said only the wealthy will experience the adverse effects of the tax increases.
At 29, I will personally see about an $800 decrease in take-home pay this year due to the way the fiscal cliff bill handles payroll taxes.
In the long-term, I will be fine and will still be able to make ends meet, but I will have to become even more frugal if I am to continue paying student loans while keeping a roof over my head and food on my table. The payroll tax deductions helped me cope with rising living expenses and a lack of pay raises, but now my expendable income will be cut in roughly half.
In the short-term, I will have to cancel my modest annual vacation to see my family in order to meet my discretionary income budget. I am a middle-class working adult feeling the pinch from this announcement and my lifestyle will have to adjust accordingly.
The reduction in payroll taxes was passed to stimulate the economy yet we are now eliminating that temporary tax deduction? Fine -- except for the fact that we are still in a recession, are we not? Isn't the recession why the fiscal cliff bill extended unemployment benefits? Those extra few dollars a week mean a lot to me as a person working paycheck to paycheck. It isn't like that money is going into savings; it is money I would be spending, hence stimulating the economy.
There are clearly winners and losers here. Winners: The unemployed. Losers: Individuals making $400,000 per year and couples making $450,000 per year. The Biggest Loser: Me, the working man.
I guess change is all I will have left once this administration is done.