Despite "Fiscal Cliff" Vote, Most to Pay More
Despite all the hype and statements from Washington, Uncle Sam's still taking a bigger bite out of most paychecks starting now.
Congress voted late New Year's Day to extend existing federal tax rates and delay automatic cuts that would have dramatically reduced cuts in automatic federal spending increases.
In Washington-speak Congress voted to avoid going over the so-called "fiscal cliff."
What you won't see in most of the Washington-speak Wednesday morning is that most people will see a bigger paycheck bite from Uncle Sam anyway.
That's because Congress did not vote to extend a two year "tax holiday" on Social Security withholding taxes. The result: For most taxpayers social security withholding tax is going up two percent from 4.2 percent to 6.2 percent starting now.
Taxpayers making $50,000 per year will shell out (via withholdings) an average $1000 more starting now than they did in 2012.