Fiscal cliff: Payroll tax change may shrink your paycheck

PHOENIX - The paycheck you're about to cash probably won't be as big as you remember.

The payroll tax increase that took effect this year means most Americans will see two percent less money.

"If you get a paycheck it will be smaller, and there is nothing you can do about it," said David Weissman, an employment attorney who works for Rose Law Group in Scottsdale. 

"If people have less money, they spend less and it might have an effect on the economy."

Technically this isn't a tax hike, but the expiration of a tax break Americans have been enjoying over the past two years meant to stimulate the economy. 

It was part of the fiscal cliff negotiations when lawmakers let the tax holiday expire.

The Tax Police Center says the average American household will see a tax increase of $1,635 this year.

 

 

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