Two percent social security tax increase has big impact on workers

Lee's Summit, Mo. - Paychecks across America are getting smaller. An expiring reduction in Social Security payroll taxes means we'll be paying two percent more.

"Two percent is a lot, it hurts!" said Gary Walker, the CEO of Magic Touch Cleaning.

He's not looking forward to his 176 employees getting smaller paychecks.

"You try to pay a livable wage, and when you deduct more, its not livable anymore," he said

Here is how the tax increase breaks down by income:

If you earn $30,000 per year, you will pay $50 more per month in taxes.

If you earn the national average of $41,000 per year, you will pay $64 more per month in taxes.

If you earn $50,000 per year, you will pay $83 more per month in taxes.

For Erika Perrin, another Magic Touch employee, the increase means she and her husband will lose $110 from their monthly budget.

"We already push pennies pretty hard," she said.

The mother of two doesn't think in plain numbers. To her, $110 translates to ...

"Two-and-a-half boxes of diapers, 110 canisters of baby food," she listed. "About four boxes of formula. That's about a week's worth of groceries, too."

Now Perrin and her family are among millions facing tough choices.

"Do we start asking family members to buy us a box of diapers?"

She's frustrated, and so is her boss. "I'm trapped," Walker said.

He said there is no room in his operating expenses to cover the lost pay for his employees. Raising prices on his customers is not an option.

"They would tell me to pick up my mop bucket and leave," Walker said.

What will the two percent hike cost you? Tell us in the comments below or on our Facebook page.

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