Monday, July 28, 2008

Obama’s “Plan” for Social Security

Details are for those who have no hope and don’t want change. 

With Obama offering few details, several news accounts suggested that his proposed tax on very high incomes would be applied just as the existing Social Security tax is levied on incomes up to $102,000.

All workers pay a 6.2 percent Social Security payroll tax on such income. Their employers match it, for a total tax of 12.4 percent. The tax applies only to earned income, not to passive income such as dividends and interest.

In recent weeks, Obama aides have quietly indicated that the proposed tax on incomes above $250,000 might be different in key aspects. The rate probably would be about 2 percent to 4 percent, not 6.2 percent, they said. It’s also possible that it would apply to more types of income, including dividends and investments.

As for benefits, the campaign has not said how the proposed tax on very high incomes would translate into new retirement income, if any, for those who pay it.

The campaign “has not put forth a specific plan” for Social Security, Obama economic adviser Austan Goolsbee said in an interview.

 

(2) Comments
Posted by Owen at 1709 hrs
Politics + Politics - General

  1. This is a big deal.  He came out a month ago talking about implementing SS tax on wages over $250k.  Does that also mean the “employer” pays their half share?  If so, that would be a MASSIVE tax on American Business over an above the effect on the invidual. 

    While it sounds like he’s backtracking, this latest release makes it worse now, since he’s considering putting SS tax on non-wage income like interest, dividends, etc.  So now would a retired person with this type of income need to pay SS tax?

    Even though this sounds like an innocous “soak the rich” deal for a certain constituency, this proposal (whatever it is) could be something that would be the biggest single “change” we’d get from an Obama presidency.  And it would have big economic reprecussions.

    Posted by .(JavaScript must be enabled to view this email address) on July 28, 2008 at 1719 hrs


  2. He’s supposedly got 300 paid foreign policy advisors, but he can’t spend a dime to hire a couple hundred that can put pen to paper on a SS plan?

    Shocking.

    Posted by .(JavaScript must be enabled to view this email address) on July 29, 2008 at 1222 hrs


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