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.”

(©2012 CBS Local Media, a division of CBS Radio Inc. CBS RADIO and EYE Logo TM and Copyright 2012 CBS Broadcasting Inc. Used under license. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed. CBS4 news partner The Miami Herald contributed to this report.)

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