Say you have an income of $96,000, under the payroll tax ceiling. How much will the 2 percentage point payroll tax increase affect your paycheck?
Your gross monthly income is $8,000. If your take-home is 65 percent of your gross, a standard assumption, then your take-home pay will be reduced by (0.02*8000)/(0.65*8000) = 0.031 or 3.1 percent. The dollar reduction in monthly take-home is $160.
Combine this with a health care premium increasing 6.3 percent (source) and the hit to take-home pay climbs to $200 or more. Combine this with pay raises that approximately match the actual rate of inflation, and you have a situation where most people’s take home pay is dropping in purchasing power.
I can’t help but believe that when the first pay stubs of the new year arrive, that a considerable amount of belt tightening will ensure.
The 1 percent that runs the country is blissfully unaware of all this, and thinks there is no problem with stiffing the American people year after year.