Americans to see huge cuts to paychecks next year
Huff Post — Your paycheck is about to take a dive. The culprit: Payroll tax relief is set expire at the end of the year and Congress is unlikely to extend it, The New York Timesreported on Monday.
On average, middle-income families have enjoyed around $1,000 in additional income from the payroll tax cut this year. The temporary tax cut lowered workers’ tax rates from 6.2 percent to 4.2 percent on wages up to $110,000. The result was to give Americans a few extra bucks of spending money each month, a move that the government had hoped would stimulate the economy.
But after the payroll tax cuts come to a close at the end of the year, an American earning $50,000 annually will now pay at least $80 more per month in taxes. All together, the tax increase will affect as many 160 million American workers, according to the Times.