Millions of Americans thought President Obama had their backs when he was talking about raising taxes on "rich people." Media reported a decided victory for Mr. Obama as he persuaded congress to sign off on his pledge to raise taxes on small businesses and wealthy Americans without cutting spending.
Turns out that what Obama signed off on was a tax increase on most working Americans, including those who can least afford it.
By allowing the Middle Class Tax Relief and Job Creation Act of 2012 to expire on Dec. 31, Mr. Obama effectively raised taxes on most working-class Americans between 30 and $40 per biweekly pay check, according to a Fox News report published Friday.
With a compliant mainstream media and a smooth re-election at his back, Mr. Obama hardly had to break a sweat in hiking Social Security taxes paid by young people who may not benefit from the system during their retirement years.
Meanwhile, on Jan. 1 the tax jumped to 6.2 percent from 4.2 percent, which means that someone earning $50,000 per year will pay an additional $1,000 annually and a household with two high-paid workers will owe IRS up to $4,500 more than in 2012.
To some people interviewed by Fox News, it seems to be a case of getting what one voted for. For example, 21-year-old Gabriella Hoofman told Fox News that she estimates her biweekly paycheck will be short $30 this pay period, which adds up to about $780 annually because Mr. Obama quietly signed off on this aspect of the fiscal cliff negotiations that funds Social Security as mainstream media lauded his efforts to raise taxes.
Many average Americans thought they had dodged the bullet on “fiscal cliff” matters since media largely reported the "fiscal cliff" deal as a tax on "rich people." But now, average wage earners already stressed by a weak economy are feeling the pinch of higher taxes.
“Although it’s a small quantity on a monthly basis, just having less money going into my paycheck will prevent me from doing things and force me to be more frugal,” Hoffman said. “I’ll be more cautious with my spending,” she added.
As millions of Americans making $50,000 and less become aware of what was in the “fiscal cliff” bill signed by the President the social media websites are lighting up.
On Twitter, #WhyIsMyPaycheckLessThisWeek is a buzz topic as U.S. workers realize that while the “rich” will certainly pay more in 2013, so will they.
“Well, looks like we're starting to pay back all of the money we've spent, without cutting back spending,” one posting read.
Another Twitter user quoted in the Fox News report sarcastically posted that the tax increase is so the U.S. government can “refill the Social Security ‘lockbox’” before stealing from it again.
“And I think a lot of people don’t even realize this is happening,” said Michael Tanner, a senior fellow at Cato Institute, a Washington-based think tank. “This kind of just slid by the wayside with all the talk of the fiscal cliff.”
Simply put, less money “definitely will be” a shock for many Americans toiling in an uncertain economy, Tanner said, adding that many will restrict impulse purchases rather than alter long-term financial planning.
“People will have less money in their pockets, so by definition, they’re going to have to make do with less,” he said. “How they change their behavior remains to be seen,” said Tanner, as quoted by Fox News.