TAXES, ECONOMY, BUSINESS NEWS
While the tax package that Congress passed New Year's Day will protect 99 percent of Americans from an income tax increase, most of them will still end up paying more federal taxes in 2013.
That's because the legislation did nothing to prevent a temporary reduction in the Social Security payroll tax from expiring. In 2012, that 2-percentage-point cut in the payroll tax was worth about $1,000 to a worker making $50,000 a year.
The Tax Policy Center, a nonpartisan Washington research group, estimates that 77 percent of American households will face higher federal taxes in 2013 under the agreement negotiated between President Barack Obama and Senate Republicans. High-income families will feel the biggest tax increases, but many middle- and low-income families will pay higher taxes, too.
Households making between $40,000 and $50,000 will face an average tax increase of $579 in 2013, according to the Tax Policy Center's analysis. Households making between $50,000 and $75,000 will face an average tax increase of $822.
"Annual income: $20,000 to $30,000
Average tax increase: $297
Annual income: $30,000 to $40,000
Average tax increase: $445
Annual income: $40,000 to $50,000
Average tax increase: $579
Annual income: $50,000 to $75,000
Average tax increase: $822
Annual income: $75,000 to $100,000
Average tax increase: $1,206
Annual income: $100,000 to $200,000
Average tax increase: $1,784
Annual income: $200,000 to $500,000
Average tax increase: $2,711
Annual income: $500,000 to $1 million
Average tax increase: $14,812
Annual income: More than $1 million
Average tax increase: $170,341
