Payroll Tax Holiday comes to an end

SPRINGFIELD, Mass. (WWLP) - The holiday is over and paychecks are left with the burn. The Payroll Tax Holiday ended as 2012 did.

The 2% tax cut had been in place for two years and on Friday it was back on 77% of American's paychecks and out of people's wallets.

“It's not going to obviously be the deal breaker for a lot of things but it's going to be frustrating to not have that extra money to be able to spend because the cost of living isn't going down, so I don't think income should be either,” said Elissa Dingman of Chicopee

A person earning $50,000 a year will have about $1,000 less by the end of 2013.

I wouldn't be surprised if a few more stores go out of business as a result of that.  I certainly hope not but it could happen,” Allen Steele of Whately.

This tax break was part of the Obama administration's plan to stimulate the economy to get through the recession.

The tax may be needed now more than the cut.

“Square up, we had two unfunded wars created by George Bush that someone's got to pay for them and we've got to get back on top.  If everybody digs a little deeper, oh well,” said Gary Winn of Feeding Hills.

Still, this could be the biggest hit to the economy's growth in 2013.