Millions Noticing Paychecks Lighter Today, Due to Payroll Tax Hike
By: Fox News
Updated: January 11, 2013
Gabriella Hoffman's paycheck is a little lighter today, thanks to a payroll tax increase that is forcing millions of Americans to make the kind of tough budget cuts their representatives in Washington lawmakers seem unwilling to tackle.
Hoffman, a 21-year-old Virginian who works at a nonprofit, estimates her paycheck will be roughly $30 less this biweekly pay period, or about $780 annually, thanks to the end of a two-year cut on payroll taxes, which fund Social Security. The tax has risen back up to 6.2 percent from 4.2 percent, costing someone making $50,000 annually about $1,000 per year and a household with two high-paid workers up to $4,500.
"As a newly-graduated person, someone coming straight out of college, I don't like the idea of having less money coming to me due to the selfish interests of people in Congress who don't have any interest in reducing our financial problems," Hoffman told FoxNews.com. "This is an impediment for future economic growth. It's going to make it harder for young people like myself to get married, find a better job, you name it."
Hoffman admits the hike won't completely alter her spending, but the University of California-San Diego graduate said she will definitely have it in mind when it comes to leisure activities and entertainment.
"Although it's a small quantity on a monthly basis, just having less money going into my paycheck will prevent me from doing things and force me to be more frugal," she said.
The looming hit to Americans' paychecks has been a hot topic around water coolers nationwide, as well as online, where several forums have been created for taxpayers to commiserate with their lighter wallets. On Twitter, #WhyIsMyPaycheckLessThisWeek has been a trending topic as most U.S. workers have either already seen less green or are preparing to do so.
"Well, looks like we're starting to pay back all of the money we've spent, without cutting back spending," one posting read.
Another user cited the need for the U.S. government to "refill the Social Security 'lockbox'" before stealing from it again as the reason paychecks are smaller.
Other postings chose to politicize the end of the tax cut that was part of the fiscal pact passed by Congress last week.
"Seems to me that anybody who is paid a check for working is considered 'the rich' in Obama's world," Jeff Hobbs of Texas wrote Wednesday.
So, what exactly does $40 mean? That's what the White House asked Americans last year when President Obama signed the Middle Class Tax Relief and Job Creation Act of 2012, which extended the payroll tax cut and emergency jobless benefits through the end of the year and prevented the typical family earning $50,000 a year from losing roughly $40 from each paycheck.
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