Fiscal deal or not it looks like the Payroll Tax Holiday could end. In 2010 there was a payroll tax holiday established to help jump start consumer spending. It gave tax payers a slight discount from normal payroll tax deductions taken out of their paycheck. Well with all the hype about the Fiscal Cliff, lawmakers have neglected to relize that the Payroll Tax Holiday is about to expire. Read full story below.

Stock Market News – Fiscal Cliff, What About The Payroll Tax Holiday..

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No matter what happens with the “Fiscal Cliff,” every working American is likely to see a substantial pay cut after Jan. 1—and that could slow the economic recovery.

That’s because the payroll tax holiday, which was launched in 2010 to help spur consumer spending, is scheduled to end this month. Though there’s a chance it might be extended under a fiscal cliff deal, it’s mostly been on the back burner with lawmakers.

The tax holiday lowered taxes for some 160 million Americans. Instead of paying a 6.2 percent rate, they’ve paid 4.2 percent. That meant a worker making $50,000 saw an increase of $960 for the year, while someone making $100,000 had over $1,900 in extra spending money.

“It’s been a very effective tax cut for the economy,” said Mark Zandi, chief economist with Moody’s. “It’s kind of the Rodney Dangerfield of taxes in that most people are not aware of it but it could bring on a significant hit to growth if it ends.”

The payroll tax cut—part of the Obama administration’s deal with Congress in 2010 over extending the Bush tax cuts— was only supposed to be a temporary fix, and that’s why it hasn’t taken a bigger role in the fiscal cliff talks, say analysts.

But it’s clear that the coming increase in payroll taxes will hurt consumers in the pocketbook and slow an already sluggish economy.

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