Friday, January 4, 2013

#WhyIsMyPaycheckLessThisWeek

Posted By on Fri, Jan 4, 2013 at 11:09 AM

No, it's not your imagination. Your latest paycheck is a little lighter.

While Congress may have averted the fiscal cliff, one of the tax holidays they allowed to expire was a lower payroll tax rate. President Obama had requested that the lower 4.2 percent payroll tax rate be extended, but lawmakers refused. The Social Security payroll tax rate is now 6.2 percent.

Simply put: No matter how much you make, you will see a small cut in your paycheck in the new year.

The nonpartisan Tax Policy Center estimates that 77 percent of Americans will see higher taxes because of the payroll rate increase, which translates to $115 billion less in disposable income.

"This was always meant as a temporary provision to stimulate the economy when it was weak," said Joe Rosenberg, a research associate at the Tax Policy Center. "There was very little political support to see it continue."

Citizens using the hash tag #WhyIsMyPaycheckLessThisWeek aren't being shy about the pocketbook punch:



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