New Yorkers will feel the sting of higher taxes in their first paychecks of the year – with wealthier households bearing the heaviest burden.
About 77 percent of American families will shell out more money to Uncle Sam in 2013 because Congress allowed for a spike in Social Security payroll taxes, according to the Tax Policy Center.
The hikes would have been a lot steeper across the board if Congress and the White House hadn’t struck a fiscal-cliff deal Tuesday night.
Households earning between $500,000 and $1 million will see an average rise of nearly $15,000 in their tax bills – while a family making $50,000 per year will pay an extra $579 a year.
The payroll tax is going from 4.2 to 6.2 percent – rising for the first time since the Obama administration lowered it in 2010 to kick-start the economy at a cost of $115 billion to the Social Security Trust Fund.
Other increases include:
* The expiration of Bush-era tax cuts for individuals making more than $400,000 ($450,000 for married couples) – including the disappearance of the $1,000-per-child credit and higher investment and estate taxes.
Those households will see a jump in their income tax rate from 35 to 39.6 percent. The capital-gains tax rate in that bracket will go up by 5 percent.
* A 3.8 percent surtax on certain investment income for individuals earning more than $200,000 per year ($250,000 for couples) as part of Obama’s 2010 health-care law.
* The tax rate on inherited estates will go up from 35 to 40 percent, though the first $5 million are exempt for individuals and $10 million for families.
“I think, living in New York, you are so used to being taxed more than the average citizen so each additional tax is hard to take,” said Elizabeth Duffy, 43, an administrator at Barnard College, who makes between $120,000 and $130,000 and will pay about $1,700 more in taxes per year.
High-school English teacher James Vescovi is already planning to cut down on essentials like clothing and groceries.
“Our health care is very high, but that we can’t cut out,” said Vescovi, a married father of three who will end up paying $1,200 more in taxes.
Vescovi, 52, is glad he already put two children through college – but he’s worried about future tuition for his 16-year-old son.
“I should tell him to apply for plumbing school,” the Manhattan resident added.
Read more at THE NEW YORK POST