For many, today is the first payday of the new year.
And for most, it's smaller than the last one...leaving many to wonder why.
As it turns out...the increase for most isn't necessarily because of what Congress did...but instead because of something they didn't do.
Back in 2008 a "Payroll Tax Holiday" was enacted to help put more money in the pockets of working Americans.
It effectively lowered the Social Security withholding rate to 4.2%.
When the showdown over the looming "Fiscal Cliff" was finally over...left in the dust was the tax holiday.
It was not extended...and has reverted to the old rate of 6.2%.
So no matter how much money you make...you will be seeing that much less in your paycheck each payday.
â??That tax is going to hit everybodyâ??s paycheck this week. Thatâ??s going to have an immediate impact on disposable income,â??â?? said James P. Angelini, associate professor of taxation and accounting at Suffolk University in Boston in an interview with the Boston Globe.The nonpartisan Tax Policy Center estimated that 77 percent of Americans will see higher taxes due to the payroll rate increase, which translates to $115 billion less in disposable income, according to The Los Angeles Times.Joe Rosenberg, a research associate at the Tax Policy Center, said, "This was always meant as a temporary provision to stimulate the economy when it was weak," according to The LA Times. "There was very little political support to see it continue."
Are you upset that your paycheck got smaller? Even though you may have been under the impression that it wouldn't?