“When you live paycheck to paycheck, every penny counts,” Martinez said. “When I get my paycheck, it’s already spent.”
Cheaper Beer
Brandon Croud, a mortgage underwriter for the Federal Housing Administration, doesn’t see the higher tax rate making a big dent in his lifestyle. He said his Jan. 4 paycheck was about $30 less than usual.
“I don’t plan to change anything because it’s not that much money,” said Croud, 30, who was drinking a Captain Morgan rum and Coke and munching on potato skins and onion rings at the 24 Seconds Bar & Grill in Berkley, Michigan, on a Friday evening. “If it were like $100 a paycheck, then I might switch to a cheaper beer or something.”
For the family earning the median U.S. income of $64,293, the return to the higher tax withholding rate translates into $1,286 for the year. Taxpayers with a salary of $113,700 or more face an annual increase of about $2,425.
Working for Free
Higher-earning consumers may not alter behavior right away, said Statman, the Santa Clara University professor. The initial loss of income will probably first show up in higher reliance on a charge card, he said.
“Many of those people aren’t going to look at their paychecks and be shocked because they are doing well enough and these aren’t huge numbers,” Statman said. “But eventually what will likely happen is it will begin to constrain people.”
Williams, the Phoenix schoolteacher, said the reduction in pay makes it feel as though he’s working a couple hours each week for free.
“You work the same amount of hours and are taking home less money,” Williams said. “I don’t like it. We’ve all given more than our fair share.”