Many wage earners are grumbling over a "tax increase" cutting into their take home pay. The first paycheck of 2013 shocked some who readily noticed a cut of two percent and began grumbling about new taxes and how the "fiscal cliff" compromise was already costing them.
But Somervell County Auditor Darrell Morison recently explained the two percent is not an actual tax increase. He said a temporary two-year cut in FICA payroll taxes - Social Security and Medicare - had expired.
"It is as simple as this - for two years we, most of us had a two percent break, and that break is now over," Morison said.
The FICA rate reverted back to 6.2 percent on Jan. 1 after two years at 4.2 percent. Effective at the beginning of the year, there is a 12.5 percent tax on all earned income up to $110,000, split between employer and employee. During the previous two years, the employees only had to pay 4.2 percent.
From his position at the helm of county finances, Morison said he has not heard a lot of grumbling from county employees.
"Everyone got so tired of hearing about the 'fiscal cliff' it wasn't a complete shock because the issue was in the news for weeks," he said.
Still, Morison said he understands how the increase in FICA deductions could be hard to swallow.
"Two percent is two percent," he said.
For an individual who earns $1,000 every two weeks, the two percent ads up to a $40 per month increase or $480 per year.
In the words of Reporter Facebook fan Gerard Thompson, "Less income translates to less spending."
"One thing I did was cut back on my cell phone bill," he said.
But the impact on federal finances is far greater, according to the Wall Street Journal, which reported the tax break cost the United States government an estimated $120 billion per year for the last two years.