What am I missing with the payroll tax increase?

[Suz D]

Sorry, I posted this on another thread, when I really meant to start a new thread.

Everyone has been talking about the payroll tax increase and how it will impact their budgets in the hundreds of $$ a month. Isn't the increase 2%? So if your payroll taxes increase by $300/month doesn't that mean that you are making $15,000/month or $180,000/yr? Is my "getting older brain" having a problem with the math or is $180,000/yr income a hardship?

I'm not trying to be snarky, I honestly think my math is off because most people who are complaining about the increase are talking about several hundred $$ a month and I personally would find it easy to cut several hundred $$ a month if I was making $180,000/year.

Or are people talking about something else?

[comicguy]

I think often people are talking about dual income famlies

2% from each person's check

[allyphoe]

Two percent for two people is still two percent. And yes, to get a $300 / month increase, whatever combination of paychecks that extra $300 is coming out of would work out to $180,000 a year.

High cost of living area, maybe.

[Suz D]

Originally Posted by comicguy

I think often people are talking about dual income famlies

2% from each person's check

But isn't 2% of the household income the same thing as 2% of each check? If one person works and makes $100,000 the witholding would increase by $2000/year (2% of 100,000). If two people work and both make $50,000 then the witholding would increase by $1000.00/person (2% of 50,000) or $2000/year. Again, please correct me if I'm wrong.

Our income is reduced by $130.00/month. We're a one income family. We live frugally enough that although that's a chunk of change, we'll reduce the amount we save (which is unfortunate), but we don't have to change our lifestyle.

[Marionnette]

Originally Posted by comicguy

I think often people are talking about dual income famlies

2% from each person's check

That would still be a combined income of $180K.

[Marionnette]

I'm just guessing here, but I think that many of the people who are saying that they are down $300 or more are looking at more than just changes due to the SS tax holiday coming to an end. I have a feeling that many of them have higher health insurance costs coming out of the pay in addition to the SS tax.

[DisneyATlast]

Are you surprised that people who make the most are the ones complaining?

[Suz D]

Originally Posted by DisneyATlast

Are you surprised that people who make the most are the ones complaining?

I am, and I guess that's why I thought I must be missing something.

[diz4ever]

Originally Posted by DisneyATlast

Are you surprised that people who make the most are the ones complaining?

And it's not only those that make the most are the ones complaining. A lot of people forgot that the 2% was temporary and that along with increased health costs hits everyone. You tend to make sweeping generalizations which is offensive whether its about "rich people" or any other portion of society.

[nunzia]

Originally Posted by DisneyATlast

Are you surprised that people who make the most are the ones complaining?

If you are referring to the other big thread on this I didn't see big earners complaining (an I'm not a big earner). The OP of that thread asked about budgets with the tax holiday coming to an end and people were just sharing how much less their checks were..and yes, many also mentioned pay freezes, medical going up, etc. The only complaining I noticed were people who were surprised that folks seemed caught off guard by this since the 2% SS witholding was always meant to be temporary and news of it coming to an end was everywhere for those who pay attention.

[jmac323]

So my check was around $60 less than it normally is this time. Times that by 2 because I get paid twice a month and that's $120.

My husband's check vary depending on what jobs he's doing, however we typically gross around the same amount every year so I figured his amount would be similar to mine making us minus $240 a month. That's a large chunk to be quite honest, even though we are dual income making around $150k a year.

[Suz D]

Originally Posted by Marionnette

I'm just guessing here, but I think that many of the people who are saying that they are down $300 or more are looking at more than just changes due to the SS tax holiday coming to an end. I have a feeling that many of them have higher health insurance costs coming out of the pay in addition to the SS tax.

This could very well be the case.

[comicguy]

Originally Posted by Marionnette

That would still be a combined income of $180K.

Yes you are right it is still a combined 180,000 butif it was one person check then only the first 115,00 or so is taxed w/ the 2%

So if each spouse made what ever amount combined to 180,000 but neither one exceeded the 115,00 threshold then that amount of $ could be correct, I also did not take into consideration of higher cost of health care as well as slight tax bracket changes.

So basicaaly I am saying is with all of the combonation of the above it is quite possible to attain the orginal figure.

Hope I explaine that a bit clearer than mu original response, reading back over it now it seems as clear as mud lol

[Judyat]

So all those individuals who make over 113,000 have nothing taken out once they reach that level. Another big plus for them.

[Cheshire Figment]

Yes. I agree. I used the same example, but for $200/month or $120,000/year.

And to expand on your point, the SS maximum is currently based on the first $113,700 of income per year, so people with incomes higher than that will not be affected over the loing term.