Expert: Post-Fiscal Cliff Tax Increases To Cost Fla. $6.5B
FLORIDA (CBSMiami) – The Sunshine State’s financial forecast was made a bit cloudy by the fiscal cliff deal reached by Congress on Tuesday. So was yours.
Since 2010, a lesser deduction in the Social Security payroll tax has been in effect, acting as a temporary pad to paychecks.
Now (post-fiscal cliff), that tax will return to its normal level, costing the state an estimated $6.5 billion, Sean Snaith, director of the Institute for Economic Competitiveness at the University of Central Florida, told the Herald/Times Tallahassee Bureau.
In addition, a total of 7.1 million households in the state are to experience a tax increase based on the deal, which President Obama signed into law Thursday morning:
The median household income in the state is $45,000 annually and those households will pay an additional $900 in taxes next year, the Herald/Times reported. The subtraction of discretionary income is causing some analysts to ask if the deal will harm the state’s fragile economic recovery.
“It’s going to provide a headwind in terms of our recovery that’s less money spent on child care, groceries or clothing,” Snaith told the Herald/Times. “The net effect is it’s going to be a drag on growth.”
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