And yet they will still pimp this as a bill to prevent tax hikes.
WASHINGTON — Only the most affluent American households would pay higher income taxes this year under the terms of a deal that passed the Senate early Tuesday morning, but most households would face higher payroll taxes because the deal does not extend a two-year-old tax break.
The legislation, which still must overcome resistance exhibited on Tuesday by House Republicans, would grant most Americans an instant reversal of the income tax increases that took effect with the arrival of the new year. Only about 0.7 percent of households would be subject to an income tax increase this year, according to the Tax Policy Center, a nonpartisan research group in Washington. The increases would apply almost exclusively to households making at least half a million dollars, the center estimated in an analysis published Tuesday.
But the Senate’s decision not to reverse a scheduled increase in the payroll tax that finances Social Security, while widely expected, still means that about 77 percent of households would pay a larger share of income to the federal government this year, according to the center’s analysis.
The tax this year would increase by two percentage points, to 6.2 percent from 4.2 percent, on all earned income up to $113,700.