According to CNNMoney, January 2013 – when compared to December 2012, represented the biggest monthly income drop for American workers in the last 20 years. The article claims that it’s a one time occurrence and has much to do with companies rushing to pay dividends late in 2012 in an attempt to avoid impending tax hikes looming in 2013 as well as the payroll tax cuts expiration which cost American workers 2 percentage points more in income taxes.
Chris Christopher, Jr. of IHS Global Insight told CNNMoney that the payroll tax cut “hurt many Americans where it counts — in their pocket books.”
[box] Wal-Mart, the nation’s largest retailer, said its late January and early February sales have been slow, which it blamed on higher payroll taxes, delays in income tax-refund processing, and higher gas prices. Gas prices rose 10% in February, according to AAA, but are expected to fall in coming weeks. Consumers are benefiting from a housing recovery and rising stock prices. The Consumer Confidence Index rose in February, showing that Americans are more upbeat about the economy than they have been in two months. [/box]
There was an interesting comment beneath the article left by a reader. I include that screenshot for you here:
Screenclip of the article – click to go: