Among the reasons:
The payroll taxes will take effect in “the first paycheck,” says Roberton Williams, a senior fellow at the TPC in an interview. “Roughly 2 percent more will be taken out.”
Congress and the White House had agreed to extend the temporary cut in Social Security taxes only through the end of this year in an effort to give the economy a boost. Neither party has shown an inclination to renew those cuts in part because it takes money away from the Social Security trust fund and increases the budget deficit.
Taxpayers will also notice that their employer is likely to receive a new schedule of withholding from the government. This will increase the amount of money automatically withheld.
This reflects the expiration of the various tax cuts.
Looking at taxes paid on cash income, here’s how the TPC estimates the looming deadline could affect you: