Payroll Tax Hike Will Hit Lower-Wage Earners Hardest

The wealthy won't be the only ones paying higher taxes under the New Year's Day fiscal deal.

The McConnell-Biden Plan allows the 2010 payroll tax cut to expire. The tax rate reverts to 6.2% on the first $114,000 workers earn this year. That’s up from 4.2% in each of the last two years.

“Although everyone is — it’s the same 2%, additional 2% for everyone, I think it’s going to impact lower-wage earners the most.”

Barbara Hale is a tax principal with UHY Advisors.

“For someone who’s earning $30,000 a year, they’re going to be paying an additional $600, and to the extent that’s spread over 12 months, they’re going to see a difference of $50 less in their take home pay as a result of the expiration of this payroll tax holiday.”

In addition to wage earners, the payroll tax hike also applies to independent contractors and other self-employed individuals.


Andrew Schneider

Andrew Schneider

Business Reporter

Andrew Schneider joined News 88.7 in January 2011. Since arriving in Houston, he has reported on the many changes wrought on the region’s economy by the revolution in domestic oil and gas production. His non-energy reporting runs the gamut from white-collar crime to cattle ranching. His work has aired on...

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