Taxpayers react to first paychecks without 2% payroll tax cut - WCIV-TV | ABC News 4 - Charleston News, Sports, Weather

Taxpayers react to first paychecks without 2% payroll tax cut

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NORTH CHARLESTON, S.C. (WCIV) -- Effective Jan. 1, the 2009 payroll tax cut expired. Depending on pay cycle, some taxpayers may have already noticed a two percent decrease in their paycheck.

"It just seems like every time we turn around, we're getting taxed for something," said Nathan Sullivan, a business owner for 40 years.

For the average $30,000 salary, two percent is about $50 a month, or about $12 a week.

"That's a tank of gas," said Sean Highsmith. "That's half of my retirement income, so if I wasn't paying that, I could be paying that to my retirement.

Highsmith owns a custom cabinet and countertop business and has about nine employees. He said he worries how the payroll increase will affect his workers.

"I don't make a lot but, they make a lot less than I do. And in their cases some of them are just barely getting by," he said. 

Bill Prewitt, a financial advisor with Charleston Financial advisors says he hasn't heard any concerns from his clients, but the $50 cut could hurt a working-class family.

"That's a lot of money, compared to people who don't got money," said Donald McFadden.

The payroll tax increased from 4.2 percent to 6.2 percent. The lower rate was costing the federal government $120 billion in tax revenue per year.

The increase will go into Social Security but, for folks like Highsmith, "If it's not guaranteed to me, then it's kind of like me investing in birth control: I don't need it."

  • Valencia Wicker

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