Despite deal, taxes going up on paychecks across Central Texas

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by MARK WIGGINS / KVUE News and photojournalist DAVID GARDNER

Bio | Email | Follow: @MarkW_KVUE

kvue.com

Posted on January 2, 2013 at 7:22 PM

Updated Wednesday, Jan 2 at 7:41 PM

AUSTIN -- At her office in North Austin, massage therapist Ashlie Von Stroh helps relieve clients of the stress of weary muscles. Like many Austinites, the single mother of one must also handle the stress of keeping up with rising costs in a growing community.

"I've been here for about five years and it just seems like everything is skyrocketing," said Von Stroh, who spoke with KVUE on a busy afternoon at Hausman Chiropractic & Acupuncture. "Just going higher and higher every year."

Late Tuesday, U.S. lawmakers approved a deal to resolve the so-called "fiscal cliff" and avoid a major tax hike on millions of working Americans just like Von Stroh. Even so, a smaller tax hike will take effect as the payroll tax holiday expires on Monday.

A scheduled two percent increase in the payroll tax rate to 6.2 percent from 4.2 percent means the average American family earning $50,000 a year will see $1,000 increase in 2013, translating to roughly $83 a month less on their paycheck.

"That's a lot, it really is," said Von Stroh. "Just thinking about it and then adding it up for the end of the year, that makes a huge, huge difference."

Along with rising property taxes in Travis County, the relatively small increase is just one more burden for many working families in the Austin area.

"It really limits our extra-curricular activities for sure," said Von Stroh, albeit admitting it's still easier to stomach than the across the board income tax hike lawmakers reversed with Tuesday's vote.

Lawmakers on both sides call the final agreement imperfect. Central Texas Congressman Re. Lloyd Doggett (D-Austin) voted in favor of the deal, but told KVUE the failure to address the payroll tax was among the many parts of the agreement with which he was dissatisfied.

"I favored a credit that would be an alternative to the payroll tax," said Doggett. "I would have provided more tax relief for those on their wages and less tax relief for those in the $250,000 to $400,000 range. It's unfortunate that Republicans insisted on taking a different approach. It's one of the parts of this agreement that I think should not have been included."

Doggett said lawmakers' next step will involve addressing the nation's debt limit.

"Having overcome a new year's day cliff, we now face a Valentine's Day cliff and maybe an April Fool's Day cliff," said Doggett. "There are many issues remaining to be resolved."

With more components of the new health care law set to take affect this year, 2013 is full of questions for business owners.

Despite the uncertainties, chiropractor Robert Hausman and his staff remain optimistic for the new year.

"That's life," said Hausman. "There's always something that's happening that's going to affect you that you may or may not have direct control over and all you can do is the best you can do at the time, and so I think it's always good to be hopeful."

"I'm a pretty positive thinker anyway, so I'm going to say I'm feeling good about it," said Von Stroh. "But I think probably just waiting to see, because at any point, anything can change." 

WALL STREET JOURNAL PAYROLL TAX CALCULATOR

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