Bosses around the country are dreading pay day thanks to the fiscal cliff deal brokered by Congress on Tuesday.
As part of the deal, politicians let the payroll tax increase. The move translates into a 2 percent increase in Social Security tax witholdings in worker paychecks. For a worker making $50,000 a year that means $80 less each month.
Now small business owners are faced with the painful work of breaking the news to their employees, CNN Money reports. Deborah Koenigsberger, a Manhattan fashion store owner, described to CNN a feeling of losing control as a business owner and an inability to look out for her employees. Keval Mehta, CEO of In-R-Food in Durham, N.C., echoed the sentiment, telling CNN, "It wasn't a decision I made. But as a CEO, you take responsibility for everything."
On the bright side, the deal will have some positive effects on small businesses. For one thing, the deal extended the Research and Development Tax Credit, which was designed to incentivize technological advances and the hiring of R&D workers.
Altogether, 77 percent of American households will end up paying more in federal taxes in 2013, according to the Associated Press. High-income families will see the biggest bump in tax increases, but many middle- and low-income families will face higher taxes too.
Even more grim: The jump in federal taxes will effectively cancel out the minimum wage hike instituted in 10 states across the country, The Huffington Post reported.