The U.S. Senate passed a budget deal on Tuesday, Jan 1 Bloomberg.com reported. The budget deal, which was passed to avoid the fiscal cliff, would raise taxes on 77 percent of U.S. households, mainly due to the expiration of the payroll tax cut, according to early estimates from the nonpartisan Tax Policy Center in Washington.
More than 80 percent of households with incomes between $50,000 and $200,000 would pay higher taxes under the U.S. Senate budget deal. The average tax increase most of these households would face would be approximately $1,635, the policy center estimates. The two percent payroll tax cut, enacted during the economic slowdown, was allowed to expire on Monday, Dec. 31.
Though the majority of the tax burden increases fall on middle class families, the top one percent of taxpayers will see tax increases as well. Among households with incomes between $500,000 and $1 million the average tax increase will be approximately $14,812
The top 0.1 percent of taxpayers, those with incomes over $2.5 million, would pay an average of $443,910 more in taxes.