The sting from higher taxes in your first 2013 paycheck is also going to sting the economy this year, particularly in the first quarter.
As of Jan. 1, the payroll tax that funds Social Security was raised two percentage points to its 2010 level of 6.2 percent. It is also by far the biggest component—$125 billion of the $190 billion—in tax increases approved by Congress to fend off a bigger wave of tax hikes from the "fiscal cliff."
Nevertheless, for most workers, rich and poor alike, taxes went up on Dec. 31 as a temporary payroll tax cut expired. That cut - a 2 percentage point reduction in a levy that funds Social Security - was put in place two years ago to help the economy, which was still smarting from the 2007-09 recession.
About 160 million workers pay this tax, and the increase will cost the average worker about $700 a year, according to the Tax Policy Center, a Washington think tank
For a household of $50,000, the hit to income is $1,000
