Ouch! Americans Feel the Pain With the Obama Payroll Tax Hike

Millions noticing paychecks lighter today, due to payroll tax hike

The average tax increase for American workers is $700 a month thanks to the bill Obama just signed into law.
Yahoo reported:

Americans are beginning to feel the pinch from Washington’s decision to embrace austerity measures aimed at bringing down the nation’s budget deficit.

Paychecks across the country have shrunk over the last week due to higher federal tax rates, and workers are already cutting back on spending, which will drag on the economy this year.

In Warren, Rhode Island, Ben DeCastro got his first paycheck on Friday in which taxes on his wages rose by 2 percentage points. That works out to about $30 a week.

“You sit back and do the calculation, and that’s $30 I’m not going to spend at a restaurant,” said DeCastro.

He said he worries that people hit by higher taxes will spend less at the chain of furniture stores where he works as a marketing manager.

Politicians in Washington made much hubbub last week about a bipartisan deal to soften or postpone some $600 billion in scheduled tax hikes and government spending cuts. President Barack Obama said the deal would shield 98 percent of Americans from a middle-class tax hike.

Nevertheless, for most workers, rich and poor alike, taxes went up on December 31 as a temporary payroll tax cut expired. That cut – a 2 percentage point reduction in a levy that funds Social Security – was put in place two years ago to help the economy, which was still smarting from the 2007-09 recession.

About 160 million workers pay this tax, and the increase will cost the average worker about $700 a year, according to the Tax Policy Center, a Washington think tank.

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  • Luddite

    The payroll tax cut should have never happened. Medicare and Social Security are in trouble because people are not paying enough into the so called trust funds.

  • cecile dildine

    Please read the text it is 700 per YEAR….

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  • Kate

    A loss of 700 per year would hit our house hard. That’s alot of money for many people. Hope all the Obama voters are happy.

  • http://HTML Annie J

    “President Barack Obama said the deal would shield 98 percent of Americans from a middle-class tax hike.” He lied, once again. Why does anyone on the left still believe anything this man says? More suffering to come…..

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  • http://Americanthinker paul

    Good. Ignorance should have consequences. These children actually believe everything from government is “free” or will be paid for by the “rich”. Time to grow the hell up people! Consider this a relatively inexpensive lesson, that is if you’re adult enough to heed it. Oh, and if you think this is end of tax hikes, think again. Everyone knows the money is in the middle class.

    But why do I waste my time writing this? Obama will blame Republicans, media will carry the message and the dolts will lap it up. Wash, rinse, repeat.

  • shadow

    A loss of 700 per year would hit our house hard. That’s alot of money for many people. Hope all the Obama voters are happy.

    Since that “increase” would have happened regardless of who was elected, and Obama was responsible for the temporary cut in the first place, this provides no reason for an Obama voter to dissatisfied, no matter how hard Jim tries to push this storyline.

  • Sasja

    Those of us who were paying attention knew better than to spend that money. We understood that was a reduction in FICA and that it would eventually go back up to where it should be. So we just socked it away and did not change our spending habits. So, I don’t feel sorry for those idiots.

  • Kate

    I think that’s called delusional. If you believe the tax increases aren’t the work of Obama, you are truly one of the lemmings. It is only going to get worse and the middle class and poor are going to have a rough way to go.

  • Formerly known as Skeptic

    The thing I noticed in this story is the first line. They actually portray Washington making YOU get by with less money as “Washington’s decision to embrace austerity measures…” Don’t get me wrong, I don’t think the payroll tax cut was a good idea in the first place and letting it expire is the right thing to do, but the “up is down” Orwellianism of that statement just blew me away.

  • Objective Analysis

    @shadow: You obama trolls are so into your propaganda that you do not understand the obvious. Obama is a Marxist/Fascist/Socialist/Statist/Communist. He despises the American Capitalist system and U.S. Constitution.

    His goal is fundamental transformation the USA to what exist in Saudia Arabia and India. Rich, poor and NO MIDDLE CLASS. Unfortunately, the middle class is what makes america great. small business comprise 87% of the business that generate wealth (not big corporations). These taxes are COSTS. Businesses goal is to minimize costs and maximize profits (sales) to exist and continue. Obama and his supporters despise wealth creation for those who are not rich. That is why he hates America. He is an overseer for a bigger purpose to create a New World Government where we are all slaves.

    Enjoy serfdom.

  • Thom99

    So it’s okay to tax those nasty rich people but not the regular folks right? The problem is people shouting the loudest to tax the rich where blinded by comrade Obama’s “promise” to “only tax the rich.”

    There’s a reason the phrase, “tax and spend” and the word “liberal” are SYNONYMOUS.

    Enjoy your pay-cut!!


    Yet these dismayed people will never connect the fact that the media lied to them, that the DNC lied to them.

    Worse, the feckless GOP will do or say nothing.

  • http://Nah,he'llblameitonBush mountainwilliam

    All of this after Obama just gave Congress a big raise. I wonder if the welfare queens checks were cut by the same per centage. NOT!!!

  • Karen Wong

    Just an FYI. Your headline says $700 a MONTH, and actually it’s $700 a YEAR.

  • Despiser

    If these turds at Yahoo consider this BS “Austerity” then they cant add 2+2…

  • Flintstone F.


    Thanks for demonstrating your math skills by putting “increase” in quotation marks.

    Obama gave us the payroll tax “holiday” (I can add) because he knew Americans were struggling. So, if that is the case why didn’t he in his ultimate wisdom make the “holiday” a “permanent vacation?”

    Liberals are just plain dumb.

    By the way, Obama spends beyond our tax capacity. I don’t suppose a liberal has the wherewithal to understand what that implies.

  • Flintstone F.

    But maybe you think minting a trillion dollar coin is genius idea.

  • Sasja

    If the progs were really serious about taxing the rich, they would start by taxing the asset rich; meaning themselves. They have their wealth and no amount of income tax increases are going to touch that. Same with the Hollyweird types. They were once again given a break so they will not be enjoying the benefits of having “skin in the game.” Buffet pays a lower percentage (by the way, he still hasn’t paid on his back taxes as yet; preferring to fight the IRS) because he does not pay himself as much as he does his secretary.

    Now for those rich who feel they are not paying enough, just write a check to the US Treasury. Of course they won’t. They only spout the lie they aren’t paying enough to keep from being a target by the perpetually envious and greedy.