Despite Fiscal Cliff Resolution, Tax Changes Coming
Americans will notice it on their paychecks
ANCHORAGE - The last minute plan from the U.S. House of Representatives that narrowly avoided the "fiscal cliff," or automatic tax increases and federal spending cuts, has wide implications, especially in Alaska, where one third of the work force is employed by the government.
An estimate from George Mason University put the potential Alaska job losses at about 10,000 jobs, something that would resonate through the economy of the state. "That's a big role in our economy, those would have been paychecks lost. And that would have had a very quick noticeable effect in our economy," said economist Neal Fried, with the Alaska Department of Labor.
The solution, which is temporary, doesn't cut federal jobs, but it does raise taxes. Americans will be paying an additional two percent on their income toward Social Security in 2013. The guidelines for payroll clerks aren't final yet. Carmen Fisher, who co-owns Once in a Blue Moose, said this year's first payroll has been especially stressful. "It's just been wait and see. We have no idea how to prepare," she said, as she prepared payroll a few days later than usual in anticipated of changing laws. She said her biggest hope was that there wouldn't be drastic changes -- and it looks like there won't be.
Fisher, like many Americans, won't have to worry about sweeping changes, at least until the next big decision in Washington: the February decision on the debt ceiling, which is the amount of money the government is allowed to legally borrow.