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Hiked Payroll Tax an Unwelcome Surprise for Many

Shortly after Congress passed legislation to avoid the fiscal cliff, with headlines touting that rates had been raised only on those making more than $400,000 per year, some buzz-killing news for the less-wealthy emerged. Workers’ share of the Social Security payroll tax, which had been temporarily cut from 6.2 percent to 4.2 percent for two years, was immediately snapping back to the higher level.

The result is smaller paychecks for all wage earners, with the country’s economic recovery still sluggish and unemployment stubbornly high. A worker making $50,000 in 2013 will take home $38.46 less per two-week paycheck, or $1,000 per year.

Source: Bloomberg Businessweek. Read full article. (link)

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