For many of the nation's working poor, the payroll tax reduction that became law on January 1 has shown no effect. In fact, it's made things worse in some cases, according to The Detroit News. The source is reporting that for many working poor - those who have negligible savings rates despite employment - the tax reduction will lead to greater costs.

Changes to the payroll tax initiated a 2 percent cut in Social Security taxes, and while that cut will lead to more income for many, taxpayers making $20,000 per year or less will actually be paying more come tax season.

The News reports that those earning below the $20,000 threshold will pay $100 more in taxes in 2011 than the previous year. Couples filing jointly will pay $500 more. It's not quite the incentive low-income workers hoped for.

"If you had a high income, you got nothing under Making Work Pay," Roberton Williams, a senior fellow with the Tax Policy Center, told the news source. "Now, if you're a low-income worker, you lose out. If you're a high-income worker, you make out like a bandit."

The tax cut also comes as the Making Work Pay Tax Credit expires. That $400 credit could cancel out any benefit the payroll tax reduction would offer, the Somerset Daily-American reports.

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