Payroll tax hike prompts spending cuts
May 15th, 2013
09:27 AM ET
1 year ago

Payroll tax hike prompts spending cuts

(CNNMoney) - Most Americans plan to cut spending to make up for income lost from the payroll tax hike, according to a New York Federal Reserve study released Wednesday.

The payroll tax cut, which was in effect in 2011 and 2012, reduced the amount withheld from workers' paychecks to 4.2%, down from 6.2%. That put an additional $1,000 a year in the pocket of the average household earning $50,000 a year. The provision was not renewed in January's fiscal cliff deal.

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Filed under: Taxes
soundoff (12 Responses)
  1. Borderless

    Tax hike on the middle class, Obama? File that with closing GITMO, having a transparent administration, bringing our troops home, and all those other major campaign promises you broke. Worst president ever.

    May 15, 2013 09:41 am at 9:41 am |
  2. rla

    this or mimimum wage hike= same result econ 101

    May 15, 2013 09:44 am at 9:44 am |
  3. Sniffit

    Guess whose spending DIDN'T and WON'T change. Guess.

    May 15, 2013 09:53 am at 9:53 am |
  4. jpmichigan

    The so call payroll tax hike, was actual return of income placed in the social security trust. For one year less was taken from employees paychecks that would have gone to social security for retirement purposes, the employee just spent the money now. The government has been stealing from social security for decades, with returning the funds and then cry foul, stating less money for future retired individuals. Now they want to short change retire persons by giving less and making them work longer so to support the government.

    May 15, 2013 10:01 am at 10:01 am |
  5. Dutch/Bad Newz, VA -aka- Take Back The House -aka- No Redemption Votes

    Stop the corporate welfare and make them pay their fair share.

    May 15, 2013 10:03 am at 10:03 am |
  6. Sniffit

    "Tax hike "

    It's not a "tax hike" for a tax cut that was always intended and written from the get-go to be temporary to finally expire as intended and written.

    May 15, 2013 10:12 am at 10:12 am |
  7. much thunder..little rain

    it may hurt a little now ,but they will need there social security cks when they retire to be the full amount..

    May 15, 2013 10:18 am at 10:18 am |
  8. Fair is Fair

    This is a "tax cut" that should never have been in place to begin with.

    May 15, 2013 10:46 am at 10:46 am |
  9. sonny chapman

    WAY back in 2001, George W. was floating the idea of reducing the top income tax rate from 39% to 36% since he inherited a Budget SURPLUS from Bill Clinton. Also, Mr. Bush had very wealthy supporters who would gain MILLIONS by the rollback of rates to when "Poppie" was Prez. We were in a sight Recession, not like the Great Recession soon to follow. It was pointed out by Dems. & some Repubs. that the SURPLUS was really the result of the 22 Million Jobs created under Clinton & the large amount of $ going into the Treasury from FICA. Mr. Bush siad HIS Proposal of lowering the top tax rate would CREATE JOBS. Many pointed out that the FICA Rate should be reduced beacuse it would 1-Stimulate Immediate Spending & 2-The FICA Payments created the "Surplus" in the 1st place. Which CHOICE did George W. make ? Maybe that could be another YOU DECIDE @ his new Library in Dallas.

    May 15, 2013 10:47 am at 10:47 am |
  10. Ray E. (Georgia)

    The "Payroll Tax" is of course the Social Security With Holding Tax. However it was not intended to retire on. You had to save some of your own money for when you retire. Many States and Municipalities are deep in the Red because of Liberal spending policies that went too far. If you don't have a Savings Plan, start one.

    May 15, 2013 10:56 am at 10:56 am |
  11. Tony

    This country was built on hate and bloodshed and it will end that way,

    May 15, 2013 11:04 am at 11:04 am |
  12. Ray E. (Georgia)

    Humm,
    Not sure where the Surplus came from under Bill Clinton. One thing was the Newly Elected Republician Congress that forced Clinton to reduce spending. Another thing may have been because of the end of the Cold War started in the Reagan Adminstration. It was, of course Big Liberal Social Policies and out of control spending, such as the Current Adminstration and the Housing Bubble that sent the Economy into a Tail Spin, of course that wasn't Liberal's and Democrats, was it??

    May 15, 2013 11:04 am at 11:04 am |