How Much More Will You Pay in Taxes?
Washington, DC-
By ANUK Staff
12.21.12
In an effort to resolve the fiscal cliff, the White House, made a key concession Monday that would be felt by U.S. wage earner. The Wall Street Journal reports that the concession allows the expiration of the payroll tax cut; a provision that has lowered the workers’ share of Social Security taxes by two percentage points during the last two years.
(Clicking on the above image will take you to the WSJ calculator to let you know how much more you will pay in taxes)
When broken down, this means an average tax increase of about $1,000 a year for the typical American household making about $50,000 annually.
Most workers are likely to see lower take-home pay in 2013 whittle away at economic growth with this decision
According to J.P. Morgan Chase, letting the payroll tax rate revert to 6.2% from the current 4.2% would raise government revenue by about $125 billion next year. This translates to 0.8% of total U.S. economic output.
Many forecasters say an increase in the payroll tax rate would put a significant damper on consumer spending.
The decision could be a surprise for many workers who might have been under the impression that tax increases in 2013 would not affect them.
