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Payroll tax increase imminent without action

November 22, 2011 12:00:00 AM PST
Shoppers could have even less money for buying presents after the first of the year if Congress doesn't vote to extend and expand the cut in payroll taxes. If it doesn't it could cost the typical middle-class family $1,000.

President Barack Obama Tuesday paid his first visit to New Hampshire in two years. He campaigned and promoted a deficit-cutting plan.

The so-called "super committee" went home Monday after failing to find any common ground on deficit reduction. Congress has until the middle of next month to act payroll taxes.

"If they vote no again, the typical family's taxes will go up $1,000 next year," said Obama. "If they vote yes, the typical working family will get a $1,500 tax cut."

And the president says if Congress refuses to act, families will be hit with a tax increase at the worst possible time.

Republican leaders like Senator Jeff Sessions (R-Ala.) say Republicans wanted an agreement.

"But they wanted a real change in the systemic direction that our nation is taking, a direction to decline, the economic decline," said Sessions. "And we've got to get off that path."

Ara Haddadian is a certified public accountant who has to guide clients through the morass of taxes with a lot of uncertainty from Washington.

"I have a lot of clients that ask me all the time, 'What's going on? How are we going to plan for next year, and the future, without knowing what the taxes are going to be, without knowing what Congress is going to do," said Haddadian.

Polls have shown people are never very confident in Congress. But with the failure of the super committee, the confidence level seems to have dropped even more.

Going into an election year, all decisions in Washington are likely to be colored by that, with each side looking for an advantage.

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