TULSA - Friday is pay day for many Oklahomans, but that pay will look slightly smaller with the initiation of the payroll tax hike.
For two years, American wage earners enjoyed a payroll tax rate -- then labeled a relief -- of 4.2 percent.
Upon agreement on a fiscal cliff deal between Congress and President Obama Monday, that payroll tax returned to a rate of 6.2 percent, much to the dismay of people like Malinda Silva of Broken Arrow.
"We try to put money towards things like the childrens' college funds. You know, just put money away for possible vacations or just investing in general," Silva said. "I'd like to get involved in that, but now with the tax increase, I don't see that happening in the future."
The two percent increase in payroll taxes, which funds Social Security, will mean a decrease of between $150 and $200 each month for the Silvas and their three children.
"When I see it, and I kind of see what I should be making and then all the expenses that come out, I mean, it's kind of shocking," Silva said. "You know, you work hard for the money that you earn and then you see so much come out of it. You're kind of thinking, 'Well, what am I even doing?'"
All wage earners are experiencing what the Silvas are. According to financial expert Jake Dollarhide, CEO of Longbow Asset Management, people living paycheck to paycheck could be those who suffer the most under the hike.
"It affects everyone, but it certainly affects the majority of Americans who do live either paycheck to paycheck or if not paycheck to paycheck, don't have a lot savings built up in case a worse case scenario happens like a loss of a job or a major big ticket expense item," Dollarhide said.
Silva prides herself on her family's ability to save. She says she hopes their savings will not have to be used, but in the event that it does, they're prepared. What could suffer, she says, are her investments. S
he also says discretionary spending will definitely take a hit.
"We'll probably try to not eat out as much. Sometimes we like to go out to eat, maybe once a week or, you know, if I go to the store to get additional things and I think, 'Oh, I want that shirt.' I mean, I probably won't be doing that anymore," she said.
Dollarhide says a two percent decrease in take home pay isn't something any consumer wants to see. In the long run, however, he says the added revenue used to fund Social Security could go a long way in keeping the retirement program afloat.
Copyright 2013 Scripps Media, Inc. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.
Also in the headlines
Oklahoma Department of Emergency Management officials say they are unsure when people will be allowed back into their homes after hundreds were destroyed by a tornado in Moore Monday.