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Impact of 'fiscal cliff' deal on all Americans' taxes

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    What changes should everyone expect?

  • Duration 7:24
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This transcript is automatically generated

While it may be.

-- one story that's not getting a lot of attention today.

Seventy plus percent of the country will have less money.

In their paycheck this week's this week because a 2% break in the payroll tax.

Has expired in other words you've got a tax break up 2% and they just took it -- Haven't heard much about today -- -- Michael Reagan is he knows he's chairman of the Reagan group Michael welcome back so.

The government give -- then the government take it -- big -- gave us a couple years ago and said.

-- -- federal Social Security tax holiday so everybody has to pay this it's on your paycheck and it's 2% and we enjoyed it for a couple years in.

Now -- so what wise is a big deal.

Out.

It is gone -- watching congress is like watching David Copperfield Las Vegas magician.

They have you -- at looking at the 400000 reporter 50000 dollar people.

Who are going to get taxed more and everybody's going to isn't that wonderful they should be paying more taxes so while you were looking there.

They voted to raise taxes on anybody and everybody who in fact gets a paycheck who pays the fight which is everybody.

And you're gonna see.

-- your check this week is gonna pay you 2% less than when you've got the last week of December and I wonder of that and go with the American people.

And I have to tell you.

If it was a Republican president.

In fact in Washington DC that was taken off for a wide official vacation.

The headline.

Would be Republican president Republican congress vote to raise your taxes.

The bill they passed -- last couple days in Washington.

What the tax bill that was enough fiscal cliff bill it with a tax bill the fiscal cliff got kicked down the road for two more months call it what it was.

A tax and spending bill.

It it increases income tax is obviously for those making over 400000 dollars or 450 -- of family.

It increases tax rates for capital gains and dividends on people who make more from 15% to 20%.

It increases the estate tax so when you die you -- to pass things on tear off spring.

Fewer states worth five million dollars on night -- when you you don't pay thirty fives that you pay 40% taxes.

And on -- -- go the tax increases and they say.

Basically 620 billion dollars in new tax extra fifteen billion spending cuts it's 41 dollars in revenue.

For every one dollar in -- 41 -- rabbit so they -- cuts it's all about revenue but the good news is.

The good news is the cuts are coming Michael they are now they are now gonna get serious and I I point you to the senate majority leader Mitch McConnell.

Listen we've got on tape.

Now it's time to get serious about reducing Washington's.

Out of control spend it.

That's a debate the American people want.

-- to debate will back.

And at the debate Republican.

Or -- for.

-- -- -- all I can think it's just conjuring up my father if I could bring him back into the room for a moment.

My father would say we -- there they go again.

I mean.

I try it's it's a lofty -- -- to -- and spending cuts but why are we supposed to believe that that that.

-- bill -- spending cuts which were unattainable.

When Republicans had a teeny bit of leverage are now going to be more attainable when they have no leverage.

-- the best it's gonna happen is they will cut.

You know spending the growth of spending that will not go out and actually cut spending in Washington it's going to go up what are we already know we already know.

The over the next few years.

The debt going to raise to twenty trillion dollars thanks so what they -- on December 31 cut.

Absolutely right so.

I did word we're the ones being fooled out here they're the ones not doing their jobs and the audacity of the -- United States last week.

Which trying to executive order give everybody increase -- a federal employee coursing through that out.

Last night but the -- was the president signed an executive -- give everybody a pay increase so.

Again they -- back in our faces they say that they're gonna have a fiscal cliff piece of legislation they don't they have a tax bill that they in fact throw us.

And what I did today I woke up this morning fired my poor me and -- start growing algae in my pool so I guess part of that 59 million.

Absolutely can't put your -- -- Byron do you see an inconsistency in need did philosophy of raising the taxes on the rich.

And it because that there was a while there was -- there was a discussion about whether they should do that right because is activists is that gonna slow growth to raise taxes on the rich.

But they've also raised taxes on the middle class by revoking this payroll tax holiday.

And so is there I guess that the question I want to ask is it do you see growth likely to slow because they have taken money out of the pocket books of not just the rich but middle class as well.

Actually -- you know what that is that's a new washing machine that's new refrigerator.

That's a new -- flat screen television.

Those little things those people go out in by may be gas for the car or whatever might -- yes the the economy is going to slow because they're not gonna have as much.

Content money to be able to spend.

Out there in the public but you -- -- don't really know what's gonna happen to them until they get their paycheck.

-- read a survey and I -- -- -- the people work at bat right there at fox and yourself.

How many of them were aware that this week's paycheck is going to be 2% less than it was last week nobody is aware of that and they won't be totally get that check and -- What they'll laugh but I thought they raise taxes -- on the rich people know they raise taxes on you.

A lot catalog companies if you get a raise it all to standard -- of -- 5% 6% especially in in these days and you know just got cut almost half of it's -- 5% raises in a 2% anyway I -- he -- -- is because.

Can't -- it couldn't last forever it was it was by its nature temporary holiday holiday doesn't go on forever.

They big they put it in place I think in 2010 to try to help -- -- really difficult time put more money in the pockets of American people they go out and spend more is stimulate the economy.

But all good things must come to an end and that tax is supposed to be I guess -- helped fund Social Security.

Well that's a discussion over -- -- believed they had and sometimes.

Yeah right and the president -- staged over the last two years.

Have been selling this to the middle class has the largest -- tax cut in American history he's the one that gave two middle class so we sold it as a tax cut.

So to put it back again you have to sell it at the tax increase if in fact it was pre sold as a tax cut.

Most people didn't see it they just saw more money coming into their paycheck -- really understand the process of most people don't.

Who get those check -- you see -- see what my my net pay is but this week they're gonna notice 2% less than their paycheck they're gonna have to question how and why.

And how and why is exactly what we're we are in fact are discussing how they wanted to short shall security they want to get more money into Washington.

I guess what the extra 2% goes to Social Security.

But -- robs the Social Security trust fund.

The congress of the United States.

Yeah love.

Or hate it -- cracked lets you -- the -- of Michael thank you.

Thank you happy -- happy new year.

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