What does the 'fiscal cliff' deal mean for paychecks

1:17 PM, Jan 2, 2013   |    comments
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CHANHASSEN, Minn. - Have a conversation with CPA Bill Miller and you may walk away with more questions. That's because these days, the answers aren't as easy to come by.

"The sense of uncertainty is really difficult," said Miller who owns William P. Miller CPA. "It's hard to advise clients, that's the major thing."

The dysfunction in Washington has found its way on his desk in Chanhassen.

Although a deal has been cut for a short term fix on what tax rates will be for Americans, a lack of a long term deal has people like Miller trying to answer questions they don't have the answers to yet.

"You'd like to give people answers because you want to help them but if they haven't set the rules, you don't know what the answer is," he said.

One thing is for sure, the payroll tax holiday is no more, which was set up temporarily two years ago.

Workers will see about a two-percent decrease in their take home pay. For example, a person making $50,000 a year will see about $80 a month slashed from his or her pay check.

But that's just a sliver of what we know, there's still so much we don't.

"What the congress is doing today should have been very easy to do long before New Year's Day," said Jay Kiedrowski, a financial expert at the Humphrey School of Public Affairs.

Kiedrowski says it seems compromise is a dirty word in Washington which contributes to the uncertainty. And based on history, he's skeptical about what the future holds.

"We've got the congressmen in place now for two years so it's going to be a rugged two years. This won't be the last time I'll be visiting with you I'm sure," he said.

Nor will it be the last time Bill Miller and people like him get a question they may not be able to answer quite yet.

"They have to solve the problem and they can't keep solving it in fixes," said Miller about Congress.

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