People in an already tight economy are seeing less money in their paychecks thanks to an increase in the Social Security Tax. Locally, people are seeing anywhere from $10 to $150 less per month in their paychecks thanks to the increase. Under the recently passed Fiscal Cliff deal, the Social Security Tax rate went from 4.2% to 6.2% as a payroll tax cut signed into law by President Obama two years ago was allowed to expire. The Social Security Tax has gone back to where it was.
The total hit to taxpayers from the tax law changes under the Fiscal Cliff Deal, according to figures from the Tax Policy Center, depends on the income level of the taxpayer. Persons making from $0 to $20,112 will pay an average of $120 more annually, depending on their situation. Persons making from $20,113 to $39,789 will pay $367 more while persons making $39,790 to $64,483 will pay $679 more annually.
Supporters of this particular change say that allowing this tax cut to expire was necessary in order to fund the Social Security System. Opponents say that these changes will mean people will get less take-home pay, meaning less disposable income and putting more pressure on an economy that is already tight.
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