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.