Paychecks will be smaller with the Fiscal cliff deal

January 2, 2013 12:00:00 AM PST
President Obama signed the bill to officially avoid the fiscal cliff from Honolulu. It boosts taxes on the nation's wealthiest Americans and spares the rest of the country from an income tax increase.

However, it won't do much to pad our pocketbooks, as every taxpayer will pay more for social security.

Starting with your very next paycheck, the government will take an extra two percent per check.

Valley business owners are wondering how consumers will react, and more importantly, shop as their paychecks will be slightly less.

For instance, if you make $50 thousand annually, it means you'll lose about a thousand dollars each year.

Small business owner Abbie Mast says every transaction counts and every customer matters.

Mast owns "Gaga Chic" in Fresno's Fig Garden and says consumers were just starting to spend again.

"I think people are just now feeling a little comfortable to let go and open their wallets, this is definitely going to make people tailor back and reconsider their purchases."

Baker, Manock and Jense Tax Attorney Jarrod Kiyuna said, "We have less money to spend on things we like or less money to save it that's what we're inclined to do, it will affect how we spend our discretionary income because we have less of it."

Kiyuna also says the deal isn't all bad though; small business owners are projected to be able to write off certain business improvements, at least for 2013.

Abbie Mast says, while that might be beneficial, there doesn't seem to be a "win-win" situation for anyone.

"As a business owner I think in the payroll tax for us it's a bit of a relief, but on the back end there's less shoppers, it's a lose lose for all of us."

In the meantime, she'll depend on things like social media, and focus on customer service in hopes that consumers will choose her store when it's time to shop.

Attorneys are also predicting that charities might be affected, as there are more restrictions to what sort of contributions you can write off on your taxes.