Deal or no deal, taxes are increasing for every single working American. And it appears no "fiscal cliff" proposal or provision being offered by the White House, Democrats, or Republicans will alter this fact.
The tax every working American will be hit with? The payroll tax increase.
"That means that the paychecks for more than 160 million Americans will be 2 percent smaller starting in January, as the payroll tax will jump from 4.2 percent to 6.2 percent. And a huge number of those hit will be middle class or working poor (Two-thirds of those in the bottom 20 percent would be affected by a payroll tax hike.)," describes the Washington Post.
The deal the Senate passed in late hours last night does not address the payroll tax hike. And no House member who has objected to the "fiscal cliff" bill has done so on the grounds of the payroll tax increase (instead, the objections are all based on how little the Senate bill cuts the bloated budget). The White House supports the already-passed Senate bill.
"So whether this particular deal passes or not, it’s basically a given that the payroll tax holiday is going away, which means a $115 billion fiscal contraction this year directly from the pocketbooks of ordinary Americans," reports the Post. "To put that in perspective, the sequester cuts that are so dreaded would cut about $110 billion this year — more or less the same amount. While the fiscal cliff deal will save middle-class families an extra $2,000 in tax pain by extending the Bush tax cuts, anyone who earns $50,000 a year will still be hit with a $1,000 higher payroll tax burden."
Over a month ago, the boss urged Congress to consider the payroll tax.
"The payroll tax, remember that?" the boss said on TV. "That was cut to 12% from 10% two years ago. It's been 10% the last two years. And I gather the Republicans have no problem -- I don't know if Grover Norquist has a problem -- with letting working class and middle class Americans have a 2% tax increase, and, that is not currently the Republican position that the payroll tax cut should be extended. And the administration is quietly happy to let that go, because God forbid they should actually cut entitlements from wealthy seniors or for others who benefit from corporate capitalism and big government."