While the media focused myopically on the impending changes in tax rates as part of the fiscal cliff negotiations, scant attention was given to the scheduled and automatic expiration of the payroll tax holiday--namely, an increase from 4.2% to 6.2%.
Because of this lack of coverage many low and middle-income Americans, contrary to what they had expected and understood, face a sober reality that their taxes will increase by a substantial degree. It is estimated that this increase will result in an average of $2,000 in extra taxes for middle-income families during 2013.
Notably, the tax burden will rise more for someone making $30,000 a year (1.7%) than it does for someone earning $500,000 a year (1.3%)
