Below is a chart that breaks down the average tax increase that Americans are facing due to the Fiscal Cliff Deal. For most people, the ending of the payroll tax break is the reason for most of the increase. If you remember, the payroll tax break temporarily lowered the payroll tax rate in 2011 (and 2012) to 4.2% from 6.2%. This rate was lowered for people who pay into Social Security (for California teachers, who contribute solely to CalSTRS, the temporarily lowered decrease did not apply).
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|
CASH INCOME |
AVERAGE FEDERAL TAX INCREASE |
| Less than $10,000 |
$68 |
| $10,000 – $20,000 |
$153 |
| $20,000 – $30,000 |
$297 |
| $30,000 – $40,000 |
$445 |
| $40,000 – $50,000 |
$579 |
| $50,000 – $75,000 |
$822 |
| $75,000 – $100,000 |
$1,206 |
| $100,000 – $200,000 |
$1,784 |
| $200,000 – $500,000 |
$2,711 |
| $500,000 – $1,000,000 |
$14,812 |
| $1,000,000 and More |
$170,341 |
—Written on January 7, 2013.