Higher taxes better than higher debt

American workers got an unpleasant surprise this month when they received their first paychecks of 2013. The typical full-time worker, who earns about $40,145 a year, found that his two-week paycheck was $30 lighter than his last check of 2012. The lost money is the result of tax increases contained in the Jan. 1 agreement between Congress and the White House to avoid the "fiscal cliff," a package of spending cuts and tax increases intended to reduce the federal budget deficit. Though $30 doesn't sound like much, it's unwelcome for households that continue to struggle in this long-stagnant economy.

By Thomas A. Firey

January 24, 2013