SAN ANTONIO - Without congressional action to avert the so-called Fiscal Cliff, 2.1 million unemployed workers will lose jobless benefits and the Congressional Budget Office predicts 3.4 million jobs could be lost.
Not to mention payroll tax breaks we’ve benefitted from for years will go away. That means you will take home at least two percent less in each pay check. Officially, the Bush-era payroll tax breaks disappear, and government spending reductions go into effect, as the New Year starts Tuesday.
High school teacher Brian Barnes has three kids and he's bracing for the impact a higher payroll tax rate would have on his household budget.
“Instead of me being able to take my kids out for dinner, whatever the case may be, I might find myself not being able to do that, because I'm being forced to pay more in taxes,” Barnes said.
How big of a hit could you take come that first payday in January?
There are a number of Fiscal Cliff calculators on the internet to help you estimate it. We used one at Credit Cards.com, which uses figures from the Tax Policy Center.
Here's how the Fiscal Cliff tax increase could affect your paycheck, if for example, you make the median income in Bexar County, which is $49,221 a year, and have a family of four.
The paycheck you receive every two weeks would go from $1,866 under the current tax rate, down to $1,775, after the rates change. That's a difference of $91 per paycheck.
Enough to force many of us to make some pretty big sacrifices. Unless budget leaders in Washington can agree to make some before the New Year.
Some analysts say that if congress and the president reach a compromise within the first few weeks of the New Year, your payroll tax cuts can be re-instated retroactively to January first.