Increase in payroll tax surprises many workers
San José, CA – Starting Jan. 1, payroll taxes paid by workers went up from 4.2% to 6.2%. This increase will affect about 77% of all households. Depending on other deductions and taxes, this will lower the take-home pay of workers by 2% or more.
Many workers were surprised by their smaller paychecks because they were misled by the rhetoric of Democratic politicians and the media that trumpeted “no tax increase for the middle class.” What the politicians and media did not make clear is that they meant no income tax increase for households earning less than $400,000. But many lower income households actually pay more in payroll taxes than income taxes and are getting hit by this tax increase.
By allowing the payroll tax to go up, the Republicans showed that their real position is “No tax increases for the rich,” while a tax increase on working people is fine. The Democrats did not even put up a fight to extend the payroll tax cut. This shows that neither party is willing to defend the interests of workers.