Fiscal Cliff Deal Cuts Average Workers’ Paycheck By $1,000

payroll tax hike with fiscal cliff deal

The tax package that Congress passed in the final hour of New Year’s Day will protect 99 percent of Americans from an income tax increase, but almost every person will still see a hit to their paychecks. That’s because the legislation did nothing to prevent a reduction in the Social Security payroll tax from expiring. Social Security is financed by a 12.4 percent tax on wages, with employers paying half and workers paying the other half. That was reduced to 4.2 percent in 2011 and 2012, saving a typical family about $1,000 a year. In the deal, that tax break — always intended as a temporary tax holiday — was allowed to expire.

Great just what we needed more mini-cliffs uncovered. The only reason they intentionally or accidentally let this expire is because Social Security went bankrupt 3 years earlier than it was suppose to, so all you people about my age and younger will be footing the bill and may never see any of this money. Thank you America! According to AOL jobs, workers earning the national average salary of $41,000 will be $820 poorer next year, with the cut greater the higher the salary up to $113,700. The people who make lower than this will really feel the pain, so I am sure we will see a rise in the division between classes the rich get richer and the poor get poorer as well as an increase in homeless.