Obama wants payroll tax on incomes above $250,000

[Auburn85 432]

http://news.yahoo.com/s/ap/20080613/ap_on_...11hhxi3PVph24cA

Democrat Barack Obama said Friday he would apply the Social Security payroll tax to all annual incomes above $250,000, which would affect the wealthiest 3 percent of Americans.

The presidential candidate told senior citizens in Ohio that it is unfair for middle-class earners to pay the Social Security tax "on every dime they make," while millionaires and billionaires pay it on only "a very small percentage of their income."

The 6.2 percent payroll tax is now applied to all income up to $102,000 a year, which covers the entire amount for most Americans. Under Obama's plan, the tax would not apply to incomes between that amount and $250,000. But all annual income above the quarter-million-dollar amount would be taxed under his plan.

Obama has talked before of establishing such a "doughnut hole" in the amount of income subject to the Social Security tax. Friday marked the first time he named a restart level: $250,000 and above.

Obama made the remarks at a retirement facility in Columbus, capital of a state he lost badly to Sen. Hillary Rodham Clinton in the Democratic primary on March 4. Republican John McCain is hoping to carry Ohio this fall, as President Bush did four years ago in his narrow win over Democrat John Kerry.

Obama said his plan "allows us to extend the life of Social Security" without raising the retirement age or cutting benefits. He said McCain "a few years ago" stated that he might consider a higher cap on incomes subject to the tax, "but today he's attacking me for holding the very same position."

Obama also criticized McCain for being open to letting taxpayers invest part of their Social Security payments in private investment accounts.

"Imagine if your security now was tied up with the Dow Jones," he said, alluding to the recent slide in stock prices. "You wouldn't feel very confident about the security of your nest egg."

Obama said he would "limit circumstances when retirement benefits can be cut," and increase the wages and benefits workers could protect in bankruptcy court. Companies would have to disclose more about their pension fund investments, he said. He vowed to end "the outrage of executives getting bonuses while workers watch pensions disappear."

[BamaGrad03 0]

That's a historically ignorant statement he made about social security. ESPECIALLY considering the fact that a Dow over 12k is blowing the DOORS off what your social security is worth when managed by the government.

[autiger4life 3]

That's a historically ignorant statement he made about social security. ESPECIALLY considering the fact that a Dow over 12k is blowing the DOORS off what your social security is worth when managed by the government.

I completely agree. I guess it is important to remember he is still a politician. He knows people here that and say, "Oh yeah it is doing poorly right now. That's a good point."

[RunInRed 16,492]

Agree, dumb statement about the DOW.

[lukeduke 8]

The other way to look at it is that would be the taxpayer choice...not something the government made them do.

[Auburn85 432]

i still find it baffling about the proposed gap from people making $102,001 to $249,999 to not pay additional Soical Security taxes, yet people making $5k- $102k pay on their entire income.

why can't Mccain hammer Obama hard about hypocrisy on being more friendly to people who make more?

Bush's tax proposal did lower taxes on the top 1%. It also lowered income tax rates across the board. The tax proposal also lowered the most popular Capital Gains tax rate to 15%. The same capital gains rate that both include people like Warren Buffet to people on this board.

Maybe I just don't get it, when someone is making $35k a year, they see making $125k a big difference.

I know most people in Congress have additional sources of income, but if by chance some don't, they would be excluded with this social security tax proposal.