USA - Higher payroll taxes an unwelcome surprise in 2013
DALE KASLER; The Sacramento Bee
Published: Jan. 16, 2013 at 12:05 a.m. PST? Updated: Jan. 16, 2013 at 6:54 a.m. PST
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While the ?fiscal cliff? compromise spared most Americans an increase in their income taxes, Congress allowed a temporary cut in payroll taxes for Social Security and Medicare to expire. The tax increase comes at a time when worker paychecks are already under pressure from rising health care premiums and ongoing furloughs in the public sector. For many, it is big enough to offset any recent pay raise.
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Little attention was paid to Social Security and Medicare tax increases, which loomed in the background of the debate. When the dust settled, Congress quietly allowed a pair of 2-year-old payroll tax cuts to expire as of New Year?s Day.
With that, Social Security taxes have gone back up from 4.2 percent to 6.2 percent. Medicare taxes have gone back up from 1.45 percent to 2.35 percent for higher-wage earners, starting at $200,000 for singles and $250,000 for couples filing joint returns.
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The nonpartisan Tax Policy Center estimated that 77 percent of U.S. households are affected by the higher payroll taxes.
?For someone making $50,000 a year, it?s a thousand bucks ? that?s significant,? said Perry Ghilarducci, a principal at Auvant Ltd. certified public accountants in Sacramento, Calif.
The higher taxes follow years of income stagnation for most Americans.
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Wages have grown only about 2 percent a year on average since 2009, according to the Bureau of Labor Statistics. Most years, pay raises for many Americans have barely kept up with inflation.
Read more here: http://www.thenewstribune.com/2013/0...#storylink=cpy
DALE KASLER; The Sacramento Bee
Published: Jan. 16, 2013 at 12:05 a.m. PST? Updated: Jan. 16, 2013 at 6:54 a.m. PST
...
While the ?fiscal cliff? compromise spared most Americans an increase in their income taxes, Congress allowed a temporary cut in payroll taxes for Social Security and Medicare to expire. The tax increase comes at a time when worker paychecks are already under pressure from rising health care premiums and ongoing furloughs in the public sector. For many, it is big enough to offset any recent pay raise.
...
Little attention was paid to Social Security and Medicare tax increases, which loomed in the background of the debate. When the dust settled, Congress quietly allowed a pair of 2-year-old payroll tax cuts to expire as of New Year?s Day.
With that, Social Security taxes have gone back up from 4.2 percent to 6.2 percent. Medicare taxes have gone back up from 1.45 percent to 2.35 percent for higher-wage earners, starting at $200,000 for singles and $250,000 for couples filing joint returns.
...
The nonpartisan Tax Policy Center estimated that 77 percent of U.S. households are affected by the higher payroll taxes.
?For someone making $50,000 a year, it?s a thousand bucks ? that?s significant,? said Perry Ghilarducci, a principal at Auvant Ltd. certified public accountants in Sacramento, Calif.
The higher taxes follow years of income stagnation for most Americans.
...
Wages have grown only about 2 percent a year on average since 2009, according to the Bureau of Labor Statistics. Most years, pay raises for many Americans have barely kept up with inflation.
Read more here: http://www.thenewstribune.com/2013/0...#storylink=cpy
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