Despite Fiscal Cliff Deal, Taxes Will Still Rise for Most Americans — Here’s Why

WASHINGTON (TheBlaze/AP) — The fiscal cliff debate is subsiding, but does that mean higher taxes for middle class Americans are a thing of the past? Well — not exactly. While the tax package that Congress passed New Year’s Day will protect 99 percent of Americans from an income tax increase, most of them will still end up paying more federal taxes in 2013.
That’s because the legislation did nothing to prevent a temporary reduction in the Social Security payroll tax from expiring. In 2012, that 2-percentage-point cut in the payroll tax was worth about $1,000 to a worker making $50,000 a year.
The Tax Policy Center, a nonpartisan Washington research group, estimates that 77 percent of American households will face higher federal taxes in 2013 under the agreement negotiated between President Barack Obama and Senate Republicans. High-income families will feel the biggest tax increases, but many middle- and low-income families will pay higher taxes too.

US President Barack Obama delivers a statement late January 1, 2013 at the White House in Washington DC. Obama said he had fulfilled a campaign promise to make the US tax system fairer with a deal to avert the fiscal cliff crisis that passed after a fierce duel in Congress. At left is US Vice President Joe Biden. Credit: AFP/Getty Images

Households making between $40,000 and $50,000 will face an average tax increase of $579 in 2013, according to the Tax Policy Center’s analysis. Households making between $50,000 and $75,000 will face an average tax increase of $822.

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