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Payroll Tax Hike Could Negatively Affect Jersey [VIDEO]

Chip Somodevilla, Getty Images

A bipartisan bill out of Washington, D.C. that would temporarily prevent a payroll tax increase is creating massive rifts for politicians on both sides of the aisle. Both the increase and proposed extension could have a major negative impact on the U.S. as well as New Jersey’s struggling to recover economy.

The payroll tax break, which averages about a thousand bucks a year for a family, runs out on December 31st of this year unless Congress votes to extend it. The proposed extension is a short one – a mere two months. While many families work hard to put food on the table amid prices for just about everything rising and wages staying the same, it’s a big problem that many will have to deal with for years to come. Many believe in order for this to work, the extension needs to be made longer – a year had been kicked around by some.

Phil Kirschner, President of the New Jersey Business & Industry Association is quite concerned. He understands the implications from both sides of the coin. He explains “right now, Congress isn’t making things easy for anyone. The economy isn’t recovering as fast as it should and to enact something like this extension for two months, it puts everyone in an unnecessary holding pattern.”

How will this affect business? Kirschner explains “it’s very difficult to hire anyone and fix the unemployment problem in this country if there’s this much uncertainty. I suggest businesses do whatever they can to keep an eye on the bottom line and anticipate a lack of earnings – at least in the first quarter of the new year. People should also budget to having less money in their paychecks for now, even if the payroll tax is extended.”

Kirschner adds hopefully the lawmakers on Capitol Hill will realize come February, that it needs to be extended for as long as possible, given the current financial straits many of us are in.

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Courtesy Associated Press

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