.

77 Percent Will Pay More In Taxes in 2013 Under Fiscal Cliff Deal

The main reason is the elimination of the payroll tax.

Despite the House and Senate reaching a Fiscal Cliff deal, 77 percent of Americans will pay more in taxes in 2013.

That's because even though just 1 percent of households will pay higher income taxes, an increase in federal payroll taxes will hit nearly every wage earner, according to analysis by the Tax Policy Center.

Individuals earning between $40,000 and $50,000 a year face an average tax increase of $579 in 2013, according to the Tax Policy Center's analysis.

The average U.S. worker would pay $679 more in taxes this year under the fiscal cliff deal passed by the Senate early Tuesday morning, while the average member of the top 1 percent of earners would pay $73,633 more, according to Tax Policy Center analysis.

The increases are relatively modest compared to what the fiscal cliff would have imposed, reports NBC News.

The payroll tax cut is gone, meaning smaller paychecks in 2013.

That tax break, in effect the past two years, reduced the Social Security tax rate workers pay to 4.2 percent. The resumption of the regular 6.2 percent rate means about $1,000 less in pay this year for people making $50,000, reported marketwatch.com.

The richest households face the biggest tax hikes, reported USA Today.

The income tax rate rises to 39.6 percent from 35 percent for individuals earning above $400,000 for individuals and $450,000 for married couples. For 2013, households making between $500,000 and $1 million will pay $14,812 more in taxes, says the Tax Policy Center analysis. Households making more than $1 million would get an average tax increase of $170,341.

Lisa Scapicchio January 05, 2013 at 12:42 PM
Obama said he wasn't going to raise taxes on us!!
Lisa Scapicchio January 05, 2013 at 01:11 PM
Was my post rejected?? Why?
BAV January 06, 2013 at 09:24 PM
Would love some consistency on such issues. We keep hearing that 47% pay no taxes, yet now we are told that 77% will see a tax increase. The issue is that FICA tax is not considered a tax by some when trying to define what percent of the population are "takers" but is a tax when trying to define who will pay more. Personally I am very happy that the tax rates will be unchanged, the MID is still in place, and the AMT will be inflation adjusted forever. As for FICA tax, it was silly to lower it in the first place and it should be allowed to return to where it had always been before.
quasimodo January 07, 2013 at 02:05 AM
You are correct. Why, with ALL the info available to the average-thinking American, most still worry, and the party-line promoters of miss-information are at still at work? YES, FICA is NOT a tax. The Democratic establishment, protecting their masters (as do the Republicans) has done the right thing: protecting their masters' welfare.

Boards

More »
Got a question? Something on your mind? Talk to your community, directly.
Note Article
Just a short thought to get the word out quickly about anything in your neighborhood.
Share something with your neighbors.What's on your mind?What's on your mind?Make an announcement, speak your mind, or sell somethingPost something
See more »