If Congress doesn’t act, taxes on the middle class will go up in 26 days. That’s when President Obama’s payroll tax cut—signed into law last year—will end. Approximately 160 million workers will begin paying 6.2 percent of their wages in payroll taxes, rather than continuing to pay the current rate of 4.2 percent. As a result, the typical family earning $50,000 a year would pay an additional $1,000 in taxes in 2012.
As part of the American Jobs Act, President Obama asked Congress to extend and expand the payroll tax cut to continue helping middle class families--an extension Senate Republicans have already rejected once. His plan would cut the rate workers pay even further, down to 3.1 percent of their wages. Under President Obama’s proposal, the same family earning $50,000 would see an extra $1,500 in their pockets next year.
Want to see how changes to the payroll tax cut will affect you starting January 1st? Use our calculator to find out how much more you’ll be paying if Congress doesn’t act in the next 26 days...and counting.