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State-by-State Figures Included

The millionaire surcharge that would have offset the cost of Senate Democrats’ proposed payroll tax cut would have affected only one-tenth of one percent of taxpayers in the majority of states, and in no state would those affected pay more than an average of 2.5 percent of their income under the surcharge, as explained in a new fact sheet from CTJ.

Nationally, just 0.2 percent of taxpayers would be affected by the surcharge and those affected would pay 2.1 percent of their income, on average under the proposal.

The surcharge would be 3.25 percent of the portion of any taxpayer’s adjusted gross income (AGI) in excess of $1 million starting in 2013. This means that a taxpayer with AGI of $1.1 million in a given year would pay a surcharge equal to 3.25 percent of $100,000, which is $3,250 (less than one-third of one percent of the taxpayers’ AGI). Taxpayers with AGI below $1 million would be unaffected by the surcharge.

Of the 49 Senators who blocked the Democrats’ payroll tax proposal yesterday, the surcharge motivated many of them. Others blocked the proposal because they objected to the idea of a payroll tax cut in principle. Most Republican Senators actually voted against the version of the payroll tax brought to the floor by GOP leaders, which would have been offset with reductions in federal government jobs and compensation. (See related story about CTJ’s figures on the payroll tax cut.)