Metro

NYers brace for full impact of fiscal cliff plunge

New Yorkers yesterday were bracing for the full impact of a plunge off the fiscal cliff on Jan. 1, which comes with massive income-tax hikes and the expiration of several tax breaks. Cash-strapped parents are terrified they won’t be able to buy essential items for their children if tax credits are slashed by half. Wall Street brokers are afraid that higher taxes will lead investors to pump less money into the economy. And small-business owners worry they’ll have to cut staff and implement hiring freezes.

POLITICIANS RUSH TO REACH DEAL

FOLKS FREAK AT SIZE OF TAX HIKES

HOW THE FISCAL CLIFF WILL AFFECT YOU

Hire and lower

By JENNIFER BAIN

Small-business owners and managers — like Max Davis, of Brooklyn’s Smith and Vine — would have to cut staff or impose hiring freezes because of fiscal-cliff cash shortages.

“If sales go down, we can’t support the staff here, or workers won’t get raises as quickly,” said Davis, who manages the Carroll Gardens wine shop.

Davis is already having flashbacks to another difficult time: the 2008 economic crisis, when “people lost their jobs and moved away for work or to cheaper neighborhoods,” he said

Without a fiscal-cliff deal, Davis worries that even the customers he’s able to keep won’t be enough.

Wine is “is a luxury item, but people can buy an $8 bottle instead of a $15 one,” he noted. “People could go buy a glass jug of Carlo Rossi and stop coming here.

“Wine stores aren’t recession-proof.”

Investment jitters

By KATE KOWSH

Wall Streeters are worried that investors would get cold feet in the fiscal-cliff aftermath and stop pumping money into the economy.

“It’s completely upsetting — clients are going to get scared to invest!” fumed broker Brian Fox of National Securities.

Failure to reach a deal would mean higher taxes on investment income — including a 15- to 20-percent increase in the tax on capital gains.

Dividends would be treated as regular income, subject to tax rates as high as 39.6 percent — more than double the current 15 percent rate.

“Disposable income leaves people and goes to the government — and it gets wasted,” said Frank Bianco, 49, senior vice president at Integra Partners.

“There’ll be no extra money for investments,” Bianco said. “It’s going to negatively affect the market, the economy, everything.”

For kids’ sake

By IKIMULISA LIVINGSTON

Father-of-two José Marrero (left) is already feeling the crunch of the looming fiscal cliff — which will slash his child tax credits in half.

His struggles started three months ago, when he was laid off from Morgan Stanley and had to figure out how to support his two children, ages 11 and 14, and his wife, Clarissa, who is going to college to become a teacher.

Then he was hit again, when Hurricane Sandy ravaged his home in the Rockaways and left his family without heat or hot water — which they still don’t have.

And now he’s bracing for another financial plunge: a 50-percent cut on the child tax credit if lawmakers on Capitol Hill fail to reach a deal.

“They’re making it tough for regular folks,” said Marrero, 40, who is still struggling to find a new job. “Anything they take from us really hurts.”

Marrero and other parents nationwide face the prospect of their child tax credit going from $1,000 per child to $500.

It would also be tough on those who rely on child-care and dependent-care tax credits, which would fall from a $3,000 deduction for one child to $2,400. The $6,000 deduction for two children would be cut to $4,800.

“Health care is too expensive. Taking care of your kids is expensive, and you can’t find jobs. I’m looking into the future, and it’s not there,” said Marrero, who also worries that, once his wife graduates, she will also have a hard time finding a job because of cutbacks in education.

“Instead of things getting better, it’s getting worse,” he said. “The government is not working for us.”

“[President John] Kennedy said, ‘Ask not what your country can do for you’ — but they need to start taking better care of us again.”