For millions of Americans, however, a tax increase will be the first thing they see. About 12 million workers will pay more this year thanks to an automatic adjustment in their payroll taxes. Unlike previous years, this rise in the Social Security “taxable minimum” —the amount of income subject to tax—is a whopper: 7.3 percent, the most in 34 years. That could cost each affected worker as much as $539, and much more if they’re self-employed.
I thought this was actually the most interesting part of the story:
About 12 million will pay more because of the higher minimum this year, the SSA estimates, out of 173 million workers paying into Social Security. In any given year, about 6 percent of all workers make more than the taxable minimum, a number that’s been consistent for decades. The SSA estimates that almost 20 percent of workers reach the taxable minimum at some point in their careers, even if it’s only for one year.
Contrary to the fiction that Americans are locked into an income strata, there is still a fair amount of income mobility in this country. These stats show that 1 in 5 people in America will be in the top 6% of earners at some point in their lives.