The payroll tax cut: what it means for you and your neighborhood
The Washington debate over a payroll tax holiday grinds on with House and Senate members meeting to work out just how Congress might extend the Social Security tax break for the rest of the year.
So who benefits from this tax break in your neighborhood?
Everyone with taxable earnings gets the break, but the more you make, the bigger the break. So an extension could have an especially big impact on parts of the country with high income levels, as illustrated by a report from the Joint Economic Committee released on Wednesday. The report analyzes the payroll tax cut savings by county or city.
Taxpayers in America’s richest counties and cities are set to take home $500 or more in tax savings if Congress and the president extend the tax break past February.
Do you live in St. Johns County in Florida, just south of Jacksonville? The median worker’s salary is $32,434, the highest in the state. The median taxpayer will take home an additional $541 if the 10-month tax cut extension goes through.
How about Denali Borough, Alaska (population 1,826 in 2010)? Residents can expect a median tax break of $835 for the rest of the year.
But top prize goes to Falls Church, Virginia. The median salary is $59,672 and the median taxpayer can expect a $995 tax break. A household with two workers making the median salary can expect nearly $2,000 in tax savings.
There’s a price to pay for all this money. A 10-month extension of the tax holiday is estimated to cost $99.5 billion, according to the Congressional Research Service. Even in an election year, this may be one tax cut that is too big for congressional deficit hawks to swallow.
But on an individual level, losing it would hurt.
Check out the JEC report and find your county or city here.