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Taxes to Rise Despite Fiscal Cliff Deal

Most Americans will take home 2 percent less money this year due to a Social Security payroll tax increase.

Despite a fiscal cliff deal being reached, working Americans will see less money in their paychecks this year.

A temporary reduction in the Social Security tax was not reinstated by the federal government, meaning our paychecks will shrink by two percent. 

“When Illinois changed their tax by 2 percent, people really didn’t notice it because Social Security taxes were lowered at the same time,” said accountant David Robbins with Nieminski Robbins and Associates Certified Public Accountants in South Barrington and Chicago. “Now the temporary lowering of the 2 percent is gone so people are going to see less take home pay.”

Robbins explained that the first $113,000 of income is taxed under the Social Security payroll tax policy. This means that a person making $100,000 will see $2,000 less money in their pockets.

“Once you give someone relief and then you take it away, it really bothers people more. Every paycheck you’re going to see it,” Robbins said.

The Senate and House did extend most of the tax breaks enacted under President George W. Bush, but the wealthiest Americans will still take a hit.  

“For single filers above $400,000 or $450,000 for married couples, they’ve implemented the new tax rate of 39.6 percent, up from 35 percent,” Robbins said.

Those who make more than $450,000 in capital gains will also be taxed more. Dividends are now taxed at 20 percent instead of the previous rate of 15 percent. 

Anthony P. January 08, 2013 at 05:55 PM
Funny how the liberal media made no mention of the 2% Social Security tax break going away. Anchor babies get Social Security, and this increase helps fund that. I've met countless people who've voted for Obama and a majority I've talked to don't have a valid reason and say "just because" and cop an attitude on how Conservatives are evil war mongering pigs etc. Sad how many ignorant and irresponsible voters there are out there. A majority of the people I know who are Conservative justify their vote when asked why. Those people who've decided to not go (R) this time around were able to rationalize their choice at least. There is a lot of abuse of our system and there are a lot of people getting handouts that shouldn't. A majority of the people I know who are on welfare voted for him and plain out say because of the help they are getting will continue under him. Some of these people are drug dealers, others are deadbeat pot heads and don't give a flying f&*% for this country other than what it hands out to them. I know a few who are legitimately disabled because of back problems and are in need of assistance and they are justified in need of the help.

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