LAS VEGAS -- Although Congress protected all but the wealthiest Americans from a federal income tax increase, most workers in the country will have to pay more this year in payroll taxes to help fund Social Security, Medicare and unemployment compensation.
That's because the Senate and House allowed a temporary 2 percent payroll tax decrease to expire.
As reported Wednesday by the Associated Press, the Tax Policy Center estimated that households earning $40,000 to $50,000 will pay an extra $579 this year and those earning $50,000 to $75,000 will face an $822 tax hike on average. That works out to roughly $48 to $68 a month for those income brackets.
The payroll tax bite for those earning more was not immediately disclosed.
The Tax Policy Center, a collaboration of the Urban Institute and Brookings Institution think tanks in Washington, D.C., estimated that the payroll tax increase will impact 77 percent of American workers.
Under a law signed by President Barack Obama, the payroll taxes that affect paychecks were reduced from 6.2 percent to 4.2 percent for 2011 and 2012, resulting in savings of roughly $1,000 a year per family. The payroll taxes now will go back to 6.2 percent.