Tax Manager Len Nitti was featured in this article originally appeared in The Star-Ledger.
The good news is that Congress's fiscal cliff fix keeps income tax rates from rising on the vast majority of Americans.
The bad news is that most Americans will end up paying higher federal taxes anyways.
That's because as part of the wrangling that produced Tuesday night's law to avoid both automatic tax increases and reductions in government spending, Congress also let expire a tax holiday for Social Security withholdings. For the past two years, most wage-earners have been paying only a 4.2 percent tax to Social Security. The new law does not extend that holiday, thus restoring the rate to 6.2 percent on wages up to $113,700.