From lunch-counter to ER: 'Fiscal Cliff' deal is wait-and-see
CHATTANOOGA, TN (WRCB) -- Two days into 2013, River Street Deli owner Bruce Weiss hasn't created a special 'Fiscal Cliff' sandwich to serve as a lunch special.
But he's fairly sure the deal that Congress cut will find some way to grill all of us. Somehow.
"All the drama, to keep everybody in the country paranoid, it's amazing," he says.
"Why should somebody who's become wealthy, why should he be penalized? Pay your fair share!"
'Fair share', as agreed to, means that Social Security will take two percent more from your paycheck, really, the same percentage it took two years ago."
If you earn between $20,000-$30,000, the Tax Policy Center estimates that'll add about $297 more to your federal bill.
Annual income Average tax increase
$20,000 to $30,000 $297
$30,000 to $40,000 $445
$40,000 to $50,000 $579
$50,000 to $75,000 $822
$75,000 to $100,000 $1,206
$100,000 to $200,000 $1,784
$200,000 to $500,000 $2,711
Source: Tax Policy Center
Spread across 26 pay periods, you may need a several checks to appreciate the difference.
My accountant may know real soon (what it'll mean for employees)," Weiss says. "By Friday, I guess he's gonna know."
The Internal Revenue Service has said only that it will make such information available soon. Earlier, it had said that allowing all of the George W. Bush-era tax cuts to expire could have left two-thirds of American taxpayers shy of the necessary documentation to file their 2012 returns before March.
The 4,200 employees of Erlanger Health System are among those waiting for answers.
"The IRS has not issued a new tax code yet," writes Erlanger's Corporate Communications Director Pat Charles in an email to Channel 3.
"Until Erlanger receives an official tax update, there will be no changes to our paychecks.@ We will adhere to the law once we know what the law is."@
Top earners may feel the bite later rather than immediately, depending upon whether they file taxes quarterly or deduct them via payroll.
The fiscal cliff deal restores pre-Bush era tax rates to individuals earning more than $400,000 yearly and to couples earning more than $450,000, to a top rate of 39.5%
Factor in those higher rates, and limits on itemized deductions, the Tax Policy Center reports: those who earn more than $1 million annually would, on average, pay $170,341 more in federal taxes.
"And we still haven't come to the spending cuts, what's really critical to dealing with our debt," says Peter Cooper, President of the Community Foundation of Greater Chattanooga.
The CFGC supports a number of programs and efforts that also have depended upon federal tax dollars, Cooper says.
"Our grant requests are up 44 percent, and we're not in a position to make up the difference," he says.
"It's one reason we tell our beneficiary organizations to work toward getting private donations to cover 80 percent of their operating expenses and long-term needs. They need to grow that donor base too."
Weiss is left with one question after the 'dealing' is (not quite) done.
"Who pays for all this and how," he asks. "They (Congress) just seem to be pushing this back and back. Are they living in the same world?"