Think the fiscal cliff deal means you won't be paying higher taxes? Think again. Yes, the package would keep lower marginal tax rates in place for middle- and lower-income earners. But lawmakers of both parties let the payroll tax cut expire Monday at midnight.
That means the portion of your paycheck going to Social Security taxes will rise from 4.2% to 6.2% on the first $113,700 in earnings. That's where it stood before 2010, when lawmakers approved the cut as a way to stimulate the economy by immediately putting more money into workers' pockets.
According to CNN Money, someone making $100,000 will receive about $167 less in their monthly paycheck - or $2,000 per year. A $50,000 income earner will see their paycheck drop by $83 a month - or nearly $1,000 a year now that the payroll tax cut has expired. And it continues to get smaller, with someone earning $30,000 losing $50 from their monthly paycheck.
The payroll tax hike has got buried under last-minute, New Year's Eve theatrics that ended with the Senate's post-midnight vote for the fiscal cliff deal, 89-8. "why is everyone forgetting the payroll tax expiry!! its a regressive tax that hits people making $50k very hard," tweeted Buzzfeed's Zeke Miller (@ZekeJMiller).
Politix analysis and via CNN Money.