Florida

TAXES

Fiscal cliff compromise will cost Florida billions

 

Florida taxpayers of all income levels will face tax increases this year as a result of the expiration of the stimulus-era payroll tax deduction.

How will it affect you?

The tax package passed by Congress will prevent one set of tax increases from hitting the vast majority of Americans, but it won’t stop them all. A temporary Social Security payroll tax reduction is expiring, hitting nearly every wage earner, and income taxes on the wealthy are going up too.

How the tax increases will affect households at different income levels:

Annual income: $20,000 to $30,000

Average tax increase: $297

Annual income: $30,000 to $40,000

Average tax increase: $445

Annual income: $40,000 to $50,000

Average tax increase: $579

Annual income: $50,000 to $75,000

Average tax increase: $822

Annual income: $75,000 to $100,000

Average tax increase: $1,206

Annual income: $100,000 to $200,000

Average tax increase: $1,784

Annual income: $200,000 to $500,000

Average tax increase: $2,711

Annual income: $500,000 to $1 million

Average tax increase: $14,812

Annual income: More than $1 million

Average tax increase: $170,341


More information

Source: Tax Policy Center


More information

Associated Press


Herald/Times Tallahassee Bureau

One group to benefit from the New Year’s Day compromise: Florida’s unemployed.

Congress extended the federal emergency unemployment compensation program, which was due to expire Jan. 1, for another year.

That means about $1.4 billion will be injected into the Florida economy, where long-term unemployment has been particularly problematic. Nationwide, the long-term jobless rate is about 40 percent; in Florida, it’s 50.6 percent.

In Florida, nearly 119,000 people are eligible for emergency unemployment assistance, which offers weekly benefits of up to $275 beyond the 19 weeks provided by state unemployment compensation.

Gov. Rick Scott had no response to the tax cut deal, but said Wednesday he would like to see Congress focus its efforts on cutting spending.

“I have never seen a tax increase that creates jobs,’’ the governor said in a statement. “Businesses create jobs and we must start cutting government spending to live within our means.

U.S. Rep. Frederica Wilson, D-Miami, who voted for the fiscal cliff deal, warned that while the nation averted one cliff, danger persists ahead as Congress must decide what to do about the postponed automatic spending cuts and the fact that the federal government has reached its debt limit. She said she fears conflict ahead as “Republicans hold out for spending cuts to some of our entitlements that Democrats hold so dearly.”

“This is what you call a temporary fix,’’ Wilson said. “This is just enough to not take us over that cliff.”

Miami Herald staff writer Toluse Olorunnipa and Tampa Bay Times staff writer Alex Leary contributed to this report.

Mary Ellen Klas can be reached at meklas@MiamiHerald.com and on Twitter at MaryEllenKlas

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