CEDAR RAPIDS, Iowa - Many Iowans and local small business owners are keeping a close eye on the fiscal cliff agreement that's in the works hundreds of miles from home.
Tuesday morning, America teetered on the fiscal cliff. Around 1:00 the Senate celebrated the New Year by finally passing a bill to avoid the cliff, and Tuesday the House will take up the vote.
It was business as usual at the Coffee Emporium and Austin Blues BBQ in downtown Cedar Rapids at the beginning of the week, but behind the scenes they were watching the debate on Capitol Hill. Downtown business owners are concerned, to say the least. They have their future and their employees to look out for, and they know a tax hike would have consequences on their business.
It could mean increasing prices on their products to pay for any future tax changes. Even more, the debate continues to create frustrations surrounding the work legislators are doing.
"There's nothing one person can do about it," said Owner of Austin Blues BBQ Barb Hartgrave. "We've got to hope they make the right choices and make the right decisions."
"It makes me mad that they don't come together and do what the majority of people want," said Owner of Coffee Emporium Robin Morris.
Financial advisors said the Capitol Hill disagreement has a bigger meaning for the country's overall financial picture. It generates uncertainty and that's not good for an ever-struggling economy or the markets.
"It just seems there are more and more of these last minute deadline that spook the economy and that's the real damage it causes," said World Trend Financial Owner Tory Meiborg.
The Cedar Rapids man manages money for families and institutions. He said the tax debate kept people guessing about what their paychecks might look like in the future. In fact, he believes the fiscal cliff is partially to blame for slower spending at the end of the Christmas shopping season.
Meiborg pointed out that even though the final agreement is still up in the air, Iowans will see tax changes on this first day of 2013 that were not part of the fiscal cliff debate.
"The big one is what's called the Obamacare tax and that is the tax on investment income for people or families that make over $250,000 in income, and that's a big deal. It's 3.8 percent in addition to normal taxes to pay for that," Meiborg said.
There's also a change for contributions to retirement plans. Instead of $17,000 a year, people can now contribute $17,500 to those accounts. That's a change due to adjustments for inflation.