Magazine content is available exclusively for TIME subscribers.TAXES: Painful New Year's Bite
WITH the first paycheck of the new year, American wage earners face an unpleasant shock: Social Security deductions 35% higher than last year. The surprise will be particularly great for those employees earning more than $9,000 who paid their debt to Social Security early in 1972 and for the past few months had been receiving paychecks free of deductions marked "PICA" (Federal Insurance Contribution Act).
For all wage earners, this year's PICA deductions will be bigger and last longer. Under measures adopted by Congress last year, a worker's Social Security taxes will rise from 5.2% to 5.8% of each paycheck....
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