Archived Story
Payroll tax increase cuts some deep
Published 12:02am Sunday, January 27, 2013NATCHEZ — LaShelia Wesley isn’t seeing as much of her friends and relatives as she used to.
She hasn’t had a falling-out or a fight. She hasn’t done something for which she’s embarrassed and is avoiding everyone.
It’s just too expensive.
At the beginning of the year, the two-year payroll tax holiday adopted under President Obama’s administration expired, raising the tax rates that fund Social Security from 4.2 to 6.2 percent overnight. For every $100 earned, that’s two additional dollars going to Uncle Sam.
Some economists have projected that the increase in taxes could clip economic growth nationally by a half percentage point.
According to the U.S. Census Bureau, the median household income for those living in Adams County is $26,784 annually. Adams County has approximately 12,074 households, meaning approximately $6,467,800.32 in new — or rather, returning — taxes will be leaving the city for the Social Security Administration’s coffers.
In Concordia Parish, that amount comes to $4,426,311.
At a grassroots level, the 2 percent increase in taxes means the average person in the area will be taking home between $500 and $600 less than they did last year.
And while that change isn’t likely going to break anybody, that extra $50 a month that working people aren’t getting means that in tight economic times something is going to have to go.
For Wesley, what had to go was the tank of gas she used to travel to see friends and family. The other funds she has were dedicated to a budget she doesn’t break — bills, child care costs for her 1-year-old daughter and groceries.
“I had to cut back on driving to save on gas because it’s so expensive,” she said. “I just come to work, pick my baby up from child care and go home.”
Wesley said she has also cut personal expenditures for herself.
“If I don’t need it, I don’t get it,” she said.
Donminque Grandson noticed the tax hike in the very first paycheck she got this year.
“It wasn’t much, but it was noticeable,” she said. “It wasn’t much, but it was enough.”
Grandson works the front desk at the Hampton Inn and said she’s happy with her job, but the new tax rates mean that she has to find another source of income, she said.
It also means she can’t save as much as she wants.
“You get to where you want to put so much into savings every month, and now you’re suddenly having to adjust and move things around it to make up for what isn’t there,” she said.
And while she’s willing to give up buying things for herself so she will be able to continue to give her 3-year-old twins treats, she said the bigger treats like a monthly movie or meal in a nice restaurant for the children might not be in the picture any longer.
“I find I can’t do that anymore,” she said.
But for Anightress Taylor, the assistant manager at O’Reilly Auto Parts in Vidalia, the new tax rates are just a part of life.
Taxes are needed, she said, and she hasn’t felt a pinch — not yet — and isn’t planning on giving anything up.
“My paychecks come in, I pay my bills and if there is something my kids or I need, I get it,” she said.
The key, Taylor said, has been keeping a tight rein on her budget since long before the tax increase.
So even though she’s taking home 2 percent less than she was last year, Taylor isn’t hurting for it.
“With the system going the way it is, you have to really monitor your money and only get stuff you need and not necessarily things you want,” she said.
“You have to budget, maintain your money better, and don’t spend it just to be spending it.”
The old adage about the inevitability of death and taxes seems to be ringing true to a lot of people these days, but Taylor said she’s not going to let one rush the other.
“If you end up worrying about it too much, you are just going to kill yourself faster,” she said.
