Fiscal Cliff: Taxes Still Raised for Most American Workers

Temporary Social Security payroll tax reduction expired on Jan. 1

Happy New Year! Wealthy Americans will pay more taxes on the income they make, but so will most Americans in 2013. The legislation that averted the so-called “fiscal cliff” tax hikes on middle class and poor American workers did not include an extension of a temporary Social Security payroll tax, which expired on Jan. 1. The Tax Policy Center estimates that 77 percent of American households will face higher federal taxes this year under the fiscal cliff deal. Households making between $40,000 and $50,000 will see average tax increases of $579. Those making between $50,000 and $75,000 will face an average tax increase of $822. Under the major elements of the fiscal cliff deal, the income taxes on individuals make more than $400,000 and couples making more than $450,000 will go up. President Barack Obama said “was the right thing to do four country,” even though neither Democrats or Republicans “got everything they wanted.” (Associated Press)

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