When it comes to the taxes we pay, President Obama’s re-election will have no impact at all on the biggest tax hike that most Americans will see next year.
That’s because both Democrats and Republicans in Congress appear willing to sit back and let this tax hit on January 1st.
And this has nothing to do with the upcoming “fiscal cliff,” that Congress will try to resolve before the end of the year.
All Workers to Get Hit
It doesn’t matter if you work on cars for a living, or work in a grocery store, or have an office job. Get ready for less money in your first January paycheck.
That’s because a secret tax hike is coming, with a temporary 2% tax break ending.
Most people don’t realize it, but for the past 2 years, workers have gotten a break in Social Security taxes, to help boost the economy.
But with Social Security on the ropes, most members of Congress — in both parties — are willing to let that temporary cut expire. It will happen under a second Obama presidency, and would have happened under a Romney one as well.
Doesn’t that Stink?
So from the “doesn’t that stink” file, the unpleasant surprise many workers will see in two months. How bad will the hit be?
- If you earn $50,000 a year, your payroll taxes will rise about $1,000 next year.
So your typical two week paycheck will be $40 smaller.
It really stinks if your family earns $100,000: Your taxes go up $2,000 next year.
Still a Slight Chance….
There’s always a chance of a last minute deal.
But it looks doubtful, because it’s really just restoring the tax rate to where it was 2 years ago.
As always, don’t waste your money.