February 11, 2013
Though the economy may not have been brought to its knees, some Americans are starting to feel the pinch of higher payroll taxes, and they claim it is already affecting their spending, The New York Times reports.
Now a part of history, the payroll tax break lightened the load of Social Security taxes by 2 percentage points in 2011 and 2012. When it was eliminated as part of the fiscal cliff deal, many economists warned it would have an adverse effect on the economy.
The new higher rate, which went into effect at the beginning of 2013 applies to the first $113,700 of earned income. Economists estimate it will cost the typical American worker about $1,000 a year, according to The Washington Post.
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