MIAMI (CBSMiami) – Congressional leaders are patting themselves on the back Wednesday after finally passing a bill dealing with the fiscal cliff. The bill prevented most tax hikes for middle-class taxpayers, but that doesn’t mean Uncle Sam won’t be taking more out of your paycheck.
Under the bipartisan bill, one tax that won’t be extended is the payroll tax cut. President Barack Obama had originally asked for the payroll tax cut to be extended, but Congressional Republicans opposed the measure which served as a stimulus.READ MORE: Seminoles Suspend Sports Betting After Court Rulings
The payroll tax cut was originally put in place two years ago during the height of the Great Recession. The tax, which helps fund Social Security, was set at 4.2 percent for the last two years.READ MORE: 23rd Annual 'A Home For The Holidays At The Grove' Comes To CBS On Sunday, December 5th
As of Tuesday, the tax reverted back to its old rate of 6.2 percent on the first $113,700 in wages. For workers earning $50,000 a year, taxes will rise by around $1,000. For a worker earning $110,100, the increase will be around $2,200, according to the Wall Street Journal.MORE NEWS: Sharp Increase In Hospitalized Children With Covid Investigated In South Africa
Businesses have allowed salaries to remain stagnant over the past few years and have not indicated they will begin to invest the trillions of dollars on the economic sidelines into higher wages as tax rates increase.