Obama to Raise Social Security Taxes On Earnings Over $250k

Sen. Barack Obama says if elected, he will require people who make over $250k a year to pay FICA (social security) taxes on the amount in excess of $250k. (I think he means he will ask Congress to pass such a law.)

Under Obama's plan, like now, you would pay taxes on amounts up to the cap of $102k. Under his plan, you wouldn't pay taxes on amounts between $102k and $250k. But over $250k, and you pay.

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.

Here's an ambiguity, at least in the news article. Compare [More...]:

Obama said his plan "allows us to extend the life of Social Security" without raising the retirement age or cutting benefits


Obama said he would "limit circumstances when retirement benefits can be cut..."

So he says both benefits won't be cut and they can be cut on a limited basis. Does he mean he won't add additional circumstances under which benefits can be cut? Which is it?

Is Obama's plan going to sell? Is it a good idea? I remember Hillary wouldn't commit to this, saying she preferred long-term solutions to a social security fix.

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    Uncapping is probably (5.00 / 1) (#1)
    by andgarden on Fri Jun 13, 2008 at 01:09:17 PM EST
    one of the least bad solutions. Social Security is not "in crisis" of course, and benefits will be paid out of the general fund if they need to be. The U.S. government will not back out of its obligations.

    The general fund is going to be in crisis (5.00 / 1) (#3)
    by dianem on Fri Jun 13, 2008 at 01:13:01 PM EST
    Once the social security system becomes a debtor instead of a creditor, the general fund is going to have major problems. I agree that social security itself is solid, but it has made a lot of loans to an outfit that has a shaky fiscal future.

    We'll do what we need to to keep paying (5.00 / 1) (#6)
    by andgarden on Fri Jun 13, 2008 at 01:14:53 PM EST
    Americans like their benefits.

    The closer you get which is >45 (none / 0) (#38)
    by BarnBabe on Fri Jun 13, 2008 at 01:30:30 PM EST
    the more you really like those benefits. At your age, early 20's, you need to just be thinking IRA Roth or 401k and if wise, SS will just be gravy. Even if you put 1 or 2% of income right now, it will snowball even if it has its ups and downs like right now. For others, it might be the only income they will have and believe me, I feel so badly for the seniors dealing with the cost of heating oil right now. Like half their SS checks.  

    No question (5.00 / 2) (#43)
    by andgarden on Fri Jun 13, 2008 at 01:33:22 PM EST
    Compound interest is my friend.

    forget IRAs and 401ks (5.00 / 2) (#64)
    by p lukasiak on Fri Jun 13, 2008 at 01:41:39 PM EST
    if the money goes into the stock market.

    You know why people keep promoting the myth that SS is in trouble in 2013 -- the year that benefits paid exceed payroll revenue?  Because they NEED to create a sense of crisin that will allow privatization of SS assets before that time.

    See, the value of the stock market for the last couple of decades has been inflated by the existence of automatic payroll deductions that go directly into stock purchase plans -- especially 401ks.  Its a constrant stream of new cash going into the markets.

    But, at around the same time that SS benefits paid exceed payroll taxes collected, the net 401K cash flow will begin to reverse -- just as there are too few workers to pay for all social security benefits, so too will there be too few contributors to 401ks to make up for the money being pulled out of those funds by retirees (and their heirs).

    We've got a nice little pyramid scheme in the stock market -- and its about to collapse once the "retirement fund" cash flow reverses itself.


    Today, there is no crisis. (5.00 / 1) (#84)
    by BarnBabe on Fri Jun 13, 2008 at 01:50:56 PM EST
    And I do not believe that privatizing Social Security is a good plan at all referencing your ups and downs of the stock market which can collapse at any moment. But if you are in a 401k and the company is matching 2% and some go a lot higher, then you are already doubling your investment. You can put it in bonds or if young, go for the growth, and yes, it will go up and down but time is on your side. With what they are paying in the banks right now, you might as well put it under your mattress. With growth, it takes off on a wild spree and then goes back but there is usually a ching ching along the way. So I still encourage some type of savings in a investment account. Pyramid or not, maybe it is the driving force in the stock market. I always thought so. I worry more about the oil trading which should come to an end hopefully sooner than later.

    Not quite right (none / 0) (#125)
    by dianem on Fri Jun 13, 2008 at 02:24:41 PM EST
    The stock markets aren't going to collapse when people start pulling money out as they hit 65. First off, it's not like they all will retire at once, or pull out all of their money at once. It will happen over decades. Second, 401k dollard aren't the entire stock market investment - there are also foreign investments, corporate investments, and private non-retirement investments, among others. Third, The money won't simply disappear into the ether. Retiree's will spend it, circulating the money so that other people can earn it and invest it in their retirement accounts. Finally, as population increases, there are more people investing, which means that the relative value of the senior's holding's goes down every year.

    There will always be fluctuations in the stock market, but it isn't going to suddenly go down because they start pulling money out. I used to think it would, by the way, until I really started thinking about it.


    I also think that young people who (none / 0) (#197)
    by hairspray on Fri Jun 13, 2008 at 07:30:59 PM EST
    make a COMBINED income of less than 35-40k may pay little in fedral and state taxes, but pay a lot of FICA and it is killing them.  It is awful if they have some kids because they are not deductible under FICA as with the other taxes. Also people who are self employed in small operations (like home remodeling, etc) are really hurt.  I wish we had a more comprehnesive solution to this issue than what Obama is proposing, although it is better than nothing.

    SS is not into sketchy loan practices... (5.00 / 3) (#20)
    by p lukasiak on Fri Jun 13, 2008 at 01:23:06 PM EST
    every penny in the ss trust is backed with the full faith and credit of the USA -- the same thing that lets you sleep at night and not worry if your bank is going under, because your deposits in that bank are insured by the FDIC, which is backed by the "full faith and credit" of the USA>

    Correct (5.00 / 3) (#24)
    by andgarden on Fri Jun 13, 2008 at 01:25:30 PM EST
    And that's why there is no crisis.

    nonsense... (none / 0) (#75)
    by p lukasiak on Fri Jun 13, 2008 at 01:47:17 PM EST
    increasing social security revenues by raising taxes simply delays the point at which we are forced to confront the fiscal insanity of George W Bush (and Barack Obama's $1000 middle class tax cuts, and McCain's 'keep all the bush tax cuts' policies).

    which is why this (none / 0) (#8)
    by Capt Howdy on Fri Jun 13, 2008 at 01:16:01 PM EST
    or some form of it is a good idea.

    Future and Past (none / 0) (#194)
    by CoralGables on Fri Jun 13, 2008 at 06:31:16 PM EST
    It also has made a lot off loans to an outfit with a shaky fiscal past..lol

    this looks to me to be a stalking horse... (5.00 / 3) (#14)
    by p lukasiak on Fri Jun 13, 2008 at 01:19:35 PM EST
    for privatization.

    1. make people pay SS taxes on income over $250K -- and these people get more benefits as well

    2. allow people subject to that tax to use 'private accounts' -- but they lose their extra benefits

    3. allow everyone to use 'private accounts' in exchange for benefit cuts

    The fact is that social security isn't in crisis.  Because the trust fund's assets earn interest, the trust runs a surplus until 2029 -- and long term predictions are notoriously unreliable.   (and lets not forget than any increase in the minimum wage increases revenue to Social Securty while doing almost NOTHING to benefit levels, because benefit levels are based on the last 30 years of income, and most minimum wage jobs are 'entry level' types that people get at the beginning of their careers).

    This is an Austen Goolsbee special, IMHO....


    Let's make a bet (5.00 / 3) (#19)
    by andgarden on Fri Jun 13, 2008 at 01:21:47 PM EST
    I think that at some point pretty soon, Obama is going to have to go after McCain on privatization. Why? Because he needs to win Pennsylvania and Ohio, and Democrats ALWAYS attack privatization in PA and OH.

    It would be suicide for Obama to do anything else.q


    Privatization is slippery. Remember that (5.00 / 1) (#29)
    by MarkL on Fri Jun 13, 2008 at 01:27:40 PM EST
    Bush was against "privatization" eventually, and even against "private accounts"---but he was all for "personal retirement accounts". That's Liebman's  preferred phrasing, btw.

    Well, perhaps (none / 0) (#37)
    by andgarden on Fri Jun 13, 2008 at 01:30:28 PM EST
    but I think Obama isn't going to cross Nancy Pelosi on this. BTW, as long as she's Speaker, there will be no privatization of any kind.

    and you trust Nancy Pelosi because... (none / 0) (#48)
    by p lukasiak on Fri Jun 13, 2008 at 01:34:52 PM EST

    She actually did stand up to GWB (none / 0) (#52)
    by andgarden on Fri Jun 13, 2008 at 01:36:39 PM EST
    on Social Security.

    and you think she'd stand up... (none / 0) (#68)
    by p lukasiak on Fri Jun 13, 2008 at 01:43:37 PM EST
    to the magical unity pony?

    On this, yes. (none / 0) (#71)
    by andgarden on Fri Jun 13, 2008 at 01:45:50 PM EST
    Eh (none / 0) (#47)
    by Ga6thDem on Fri Jun 13, 2008 at 01:34:45 PM EST
    Bush swore up and down he was against ss privatization in 2004 and people believed him until 2 days after the election. Anyway, unless McCain has a record of voting for ss privatization then I don't think it helps Obama much.

    He does have a record (none / 0) (#56)
    by andgarden on Fri Jun 13, 2008 at 01:38:26 PM EST
    man (5.00 / 1) (#21)
    by Capt Howdy on Fri Jun 13, 2008 at 01:23:10 PM EST
    I told you so would not even make ME feel better if this is the case.
    and I love saying I told you so.

    Bruce Webb has been writing about this (none / 0) (#16)
    by MarkL on Fri Jun 13, 2008 at 01:20:27 PM EST
    for eons.

    Obama the Crypto-Conservative (none / 0) (#159)
    by flyerhawk on Fri Jun 13, 2008 at 03:20:02 PM EST
    It amazes me how some of you can find an ulterior motive in EVERYTHING he does and that this motive is almost unerringly a secret Conservative plan.

    First off SSA is schedule to run at a deficit starting in 2017 not 2029.

    Secondly the rest of your comment is here is nothing but wild speculation and not consistent with Obama's past comments regarding SS.  Where does he mention extra benefits?  Where does he mention private accounts?  Don't make things up, please.

    This is a win-win for Obama.  He basically proposes something affects less than 3% of Americans and neutralizes the SS arguments from the Right.


    neutralizes the SS arguments from the Right (none / 0) (#165)
    by mm on Fri Jun 13, 2008 at 03:48:00 PM EST
    We already had.  Now Obama wants to open up this can of worms again.  

    The problem is, once you put it back on the table, we're going to have 100 Senators and 500 Congressman all weighing in.  

    This is one of the prime reasons I can't support Obama.  


    that is absurd (none / 0) (#166)
    by tben on Fri Jun 13, 2008 at 04:02:12 PM EST
    I dont know how many times, in how many ways Obama has to make it clear to any rational person listening, that he is totally opposed to privitzation. Why do you insist on subjecting all of us to this constant derangement stuff?

    Whats this "allow people to use private accounts" stuff? Since when is anyone NOT allowed to use a private account to save for retirement?

    There is no question about the fact that the trust fund will soon need to start cashing in its IOUs, which means we have to pay through general tax revenues into the system. And there is no question but that at some point those IOUs will be gone, and there will be an even greater need for general tax revenues in order to keep benefits at their current level.

    In either case the money has to flow, and it flows from taxpayers to SS recipients. Whether it flows through general revenues, or through increased payroll taxes, it comes from the same general place (all of us).

    The only difference with the Obama proposal is that the necessary revenue (for paying UNCUT benefits) comes exclusively from the top 3% of earners - i.e it is the MOST PROGRESSIVE proposal.

    Doing nothing about payroll taxes means that the money comes from general revenues. It doesnt mean that there arent new taxes, just that they are collected in a less progressive manner.


    The thing about Social Security is (5.00 / 1) (#170)
    by FlaDemFem on Fri Jun 13, 2008 at 04:10:51 PM EST
    that everyone is entitled to it, but not everyone needs it. When my grandmother became eligible for SS, she tried to tell the government that she didn't need it or want it. She said keep it and give it to someone who does need it. Apparently, that would have messed up their bookkeeping or something, so she got social security payments even though she had no need for it. She used it to supplement a local college scholarship which didn't cover living expenses. She said that students can live on what Social Security pays, which would save the student having to get a job that would take time away from school work.

    If they reformed Social Security to enable people who become eligible to refuse payment, then those payments would stay in the kitty. The refusal could be renewable, say on a yearly basis, so that should someone lose their pension or savings, they could opt in on the payments. I mean, this country has more millionaires than any other, why pay them Social Security? Yes, they paid in, but given the option to opt out, don't you think most of them would?


    This turns social security from ... (5.00 / 4) (#2)
    by dianem on Fri Jun 13, 2008 at 01:10:15 PM EST
    ...an insurance program to a tax sponsored welfare program. The whole point of the  program has always been that people pay in and people get a proportionate amount out. We've been chipping away at that, but have never actualy gone to the extent of simply acknowledging that the paygo nature of the progam was a failure and we need to tax the rich in order to fund it. I know that this will only effect a small number of taxpayers, but it undermines the whole program, imo. Surely, there are other options?

    You said it for me! (5.00 / 3) (#4)
    by MarkL on Fri Jun 13, 2008 at 01:14:12 PM EST
    By the way, raising the cap on the payroll tax  one of four steps of the Liebman et. al. privatization plan. The short term excess funds will be used to create private accounts.

    I agree (5.00 / 4) (#54)
    by elmey on Fri Jun 13, 2008 at 01:37:36 PM EST
    This is a bad idea and undermines support for the program among people in the upper income range. Social Security does not need extra funds right now, and may never need them, depending on the country's economic growth.
    One of the things that people like Krugman warn about is that bringing in new funds this way is simply a way to cover up the deficits the general fund is running.

    rich people have (none / 0) (#69)
    by Capt Howdy on Fri Jun 13, 2008 at 01:43:52 PM EST
    like SS or really cared about it.  as long as they get their checks.
    and I am surprised at the talk of the non-crisis.
    a crisis is coming. there is absolutley no doubt about that.
     how soon it arrives depends on many things including the state of the economy and that aint looking so good right now.

    "a crisis is coming" is just plain false (5.00 / 2) (#77)
    by rilkefan on Fri Jun 13, 2008 at 01:47:34 PM EST
    See e.g. Krugman.  The only question is whether the govt. decides to default on its loans, and destroy the world economy in the process.

    it is not false (1.00 / 1) (#78)
    by Capt Howdy on Fri Jun 13, 2008 at 01:49:05 PM EST
    Read the economists - there is no SS crisis (5.00 / 2) (#102)
    by songster on Fri Jun 13, 2008 at 01:57:57 PM EST
    The coming crisis is in Medicare.  That's why there's starting to be some political support for universal health care.

    No. But there is a U.S. Fiscal crisis (5.00 / 1) (#162)
    by dianem on Fri Jun 13, 2008 at 03:26:39 PM EST
    Social security has plenty of money, even if the U.S. has to default on the trillions worth of bonds it currently owes to the fund. Social Security will be good to go for decades. But ... the U.S. treasury has gotten used to treated SS money as a tax, and it's going to be hard to 1) start giving that money back to the people and 2) find ways of paying our debts without the SS cash flow.

    The "in crisis" frame... (5.00 / 6) (#108)
    by kredwyn on Fri Jun 13, 2008 at 02:00:24 PM EST
    is one of the things that got Obama in trouble with a whole bunch of people early on.

    We'd just fought a battle against the GOP's efforts to privatize Social Security by claiming that there was a great crisis looming.

    IIRC there are quite a few economists who argue that the "crisis" is a made up one...and unfortunately, one that Obama bought into.


    Obama advisers advocate SS privatization (5.00 / 2) (#114)
    by Josey on Fri Jun 13, 2008 at 02:08:59 PM EST
    don't they?

    One of them does.. (none / 0) (#190)
    by rjarnold on Fri Jun 13, 2008 at 05:59:49 PM EST
    I think his name is Jeff Liebman. The rest of them haven't said much about it.

    Refute Krugman or you're chattering n/t (none / 0) (#99)
    by rilkefan on Fri Jun 13, 2008 at 01:57:14 PM EST
    not with you (5.00 / 1) (#101)
    by Capt Howdy on Fri Jun 13, 2008 at 01:57:47 PM EST
    FWIW, (5.00 / 3) (#62)
    by seeker on Fri Jun 13, 2008 at 01:41:10 PM EST
    that was precisely why the the SS tax was initially capped.  FDR did not want there to be any possibility of the benefits being considered "welfare".  He believed they would be so considered if there was substantial inequity in contributions.

    OTOH, circumstances have changed greatly.  Then, the income tax was low; now it is substantial.  The question that occurs to me is whether or not people might accept the higher FICA rate now that direct income taxation is more acceptable (by many, but not all).  

    My guess is that this increase would cause notions that SS was becoming "welfare," especially after the nearly 40 years of anti-taxation rhetoric to which we have been subjected.  (Believe it or not, some of us remember a time when paying taxes was considered an unpleasant duty, but largely accepted as necessary.)


    We need to reframe paying taxes (5.00 / 3) (#81)
    by madamab on Fri Jun 13, 2008 at 01:49:54 PM EST
    as patriotic; the dues we pay for a functioning society. We also need to emphasize that if we pay more taxes, we will get more benefits.

    I'd be happy to pay $5 for a gallon of gas if we had national universal health care, 5 weeks guaranteed vacation, a true living minimum wage, a great public transportation system, etc. etc. etc. the way they do in Europe.


    To a large extent, (5.00 / 1) (#143)
    by seeker on Fri Jun 13, 2008 at 02:47:05 PM EST
    that is the basic attitude I remember prior to the 1970s, and especially before Reagan.

    Yup. (none / 0) (#146)
    by madamab on Fri Jun 13, 2008 at 02:52:44 PM EST
    That's how I remember it too.

    Raygun basically said that society can work with massive deficits, tax cuts on the wealthy, no social safety net and an "every man for himself" attitude.

    Even Reagan was forced to raise taxes several times, however; although you won't hear those Cato Institute types highlighting that failure of Reaganomics.


    What we know (none / 0) (#201)
    by denise on Fri Jun 13, 2008 at 09:36:27 PM EST
    is that Roosevelt was right about Social Security. It's had broad support through good times & bad because it's not perceived to be an income transfer scheme.

    We shouldn't risk messing this up. The boomers have already paid in extra for our retirements. Social Security shouldn't take in more than is needed to pay the benefits. If taxes need to be raised to pay the borrowed money back into the system, they should be general taxes, not SS taxes.


    I dont agree (4.50 / 2) (#7)
    by Capt Howdy on Fri Jun 13, 2008 at 01:14:54 PM EST
    it is still social security tax.  it still works the same way only now more justly so.
    its crazy that rich people dont pay over the cap and then can draw out what they dont really even need.
    I would also be for means testing.
    and I think the gap between 102 and 250 is a little odd.
    I suspect he thinks he has a lot of voters in that bracket.

    Here's the problem (5.00 / 3) (#63)
    by frankly0 on Fri Jun 13, 2008 at 01:41:37 PM EST
    with what you say:

    its crazy that rich people dont pay over the cap and then can draw out what they dont really even need.

    Insofar as SS is conceived of as something given to people based on their need, as opposed to what they put in, the delicate political balance behind SS -- put in place explicitly even back to its inception under FDR -- is disrupted.

    Why would a politician who wants an invaluable progressive program to flourish, choose instead to monkey with some of its basic political dynamics without any real provocation?

    I think because he doesn't really give a large fig about that program. He cares to be thought of as a savior of something that needs no saving, even if it puts at risk the very thing his actions are purporting to rescue.


    look (none / 0) (#72)
    by Capt Howdy on Fri Jun 13, 2008 at 01:45:55 PM EST
    I am certainly not here to defend Obama or his motives.
    but like I said before it is either monkey with the cap or go to means testing.  which do you think they would like least.
    I think they would freak at means testing for exactly the reasons you mention.

    No, it isn't. (5.00 / 3) (#79)
    by masslib on Fri Jun 13, 2008 at 01:49:24 PM EST
    SS has a surplus today.  In 40 years, it will still have 70% funding, then a huge surge in funding as the boomers die out.  There is no crisis.  I actually oppose tinkering at all, and certainly, I oppose means testing, both of which weaken the political concensus on social security.  Our crisis in the deficit not social security.

    I see a lot of (none / 0) (#87)
    by Capt Howdy on Fri Jun 13, 2008 at 01:53:11 PM EST
    assertions and opinions masquerading as fact here.
    I have seen very different figures.

    I suggest you look (5.00 / 2) (#103)
    by frankly0 on Fri Jun 13, 2008 at 01:58:04 PM EST
    at what Krugman has written about SS in the past.

    I think he understands the issues pretty well, and can give a sufficiently balanced account.


    He cares about (none / 0) (#202)
    by denise on Fri Jun 13, 2008 at 09:51:15 PM EST
    pandering to the young. In order to undermine public support for Social Security, the privatizers convinced them that it won't be there for them anyway. Obama's young followers are always expressing resentment about Social Security and threatening to pull the plug on it. A lot of his campaign strategy was based on stirring up generational division.

    If we tamper with the basic funding structure for Social Security, we may put the whole program at political risk.

    I wish I could get these kids to see how much they're going to need it. They need to know that rather than buying into the idea that it won't be there, they have to fight to make sure it is. And think long & hard about the unforeseen consequences of fixing something that isn't broken.


    Rich people don't earn over the cap (5.00 / 2) (#80)
    by dianem on Fri Jun 13, 2008 at 01:49:26 PM EST
    Unless they plan on paying rich people a LOT more money in benefits, they will not draw even remotely what they are paying in. Even now, there is a form of means testing, since social security amounts are not taxed unless you have other income. You don't means test for insurance programs - and I don't know what program you are promoting, but the one I'm talking aobut is "SSI". Social Security Insurance.

    This will also undermine the arguments for single payer national health insurance. Right now, SSI is a great example of a national plan that everybody pays into and that pays out benefits fairly. If we convert SS into a welfare program funded by rich people, then the argument will be that any national health plan is destined to become just such a plan, as opposed to an insurance plan with low overhead.


    Social Security IS a welfare program (none / 0) (#160)
    by Newt on Fri Jun 13, 2008 at 03:25:16 PM EST
    not just a retirement program, and as such should be more progressively taxing wealthier Americans.  I'm OK with the donut hole, given the distribution of wealth in our country.  

    NO, it is NOT a welfare program (none / 0) (#203)
    by denise on Fri Jun 13, 2008 at 09:52:29 PM EST
    and if you turn it into one, you can kiss it goodbye.

    other options? (none / 0) (#169)
    by tben on Fri Jun 13, 2008 at 04:09:03 PM EST
    sure. Raise the retirement age.

    When first instituted, the average life expectancy was barely over 65 - thus only those who lived longer than average ever recieved any benefits. Now average LE is well into the seventies - thats the main reason that the system doesnt work as designed.

    other options?
    Cut benefits.

    Thats all I can think of. Raise the age, cut the benefits, raise taxes under the existing cap, or raise the cap.

    I like Obama's approach the best, but I am open to other possiblities if you can think of them.


    It DOES work as designed (none / 0) (#205)
    by denise on Fri Jun 13, 2008 at 10:05:13 PM EST
    Life expectancy at age 65 hasn't increased all that much, and the Social Security tax has been greatly increased over the years.

    Lots of people are still in good health at 67, but lots aren't. People who have done physically taxing jobs have wrecked bodies by then. And finding a job at that age is not easy - especially if you have health problems.

    Reducing benefits? The benefits are quite low already. I think the average person gets about $1000 /month. People don't have pensions any more, and lots of them haven't saved very much. Do you want to walk out your front door and have to step over old people living on your sidewalk?


    The doughnut (5.00 / 2) (#13)
    by Ga6thDem on Fri Jun 13, 2008 at 01:19:16 PM EST
    hole is dumb. It's the same thing that W. used for medicare prescription drugs. The doughnut hole usually fails.

    Homer: mmm donuts n/t (none / 0) (#85)
    by DandyTIger on Fri Jun 13, 2008 at 01:52:22 PM EST
    huh (none / 0) (#171)
    by tben on Fri Jun 13, 2008 at 04:11:00 PM EST
    first off, Bush's donut hole was for benefits, not taxes.
    And what do you mean "usually fails". The Medicare example would be one example if it were comparable. Are there any others you are think of when you say "usually"?

    Another Question (5.00 / 6) (#17)
    by The Maven on Fri Jun 13, 2008 at 01:20:47 PM EST
    Without having examined any specific proposal here, perhaps it's already addressed, but I would also wonder what this might do to any payout schedules from Social Security.  My understanding is that the maximum amount an individual is supposed to be eligible to receive is largely a factor of the totals that said person had paid into the system over the course of their working lifetime.

    A strong argument in favor of capped benefits has always been that since there was a maximum amount that could be paid in, it was entirely logical that there ought to be a maximum amount being paid out as well.  Under this new proposal, however, high-income individuals will be paying significantly larger sums into the Social Security Trust Fund, thus disrupting the equipoise of the current system.

    Conceptually, I'm certainly not averse to this general idea, but as is usually the case, the devil is in the details, and until that all becomes clear, I'm not sure whether is will actually be a good idea that might have a decent shot at legislative passage.

    You are getting uprated (5.00 / 2) (#26)
    by madamab on Fri Jun 13, 2008 at 01:26:39 PM EST
    just because you used the word "equipoise."



    The whole comment (none / 0) (#33)
    by madamab on Fri Jun 13, 2008 at 01:29:40 PM EST
    was great, but I wish I could have given it an extra 5 for the vocabulary alone. :-)

    those of us (5.00 / 3) (#22)
    by Jlvngstn on Fri Jun 13, 2008 at 01:23:16 PM EST
    in the upper bracket and including those in the hole of the donut should be paying more to help prevent a crisis down the road.  We complain but we can adjust.  I get taxed out the yinyang and despite my hatred that the money is going to the war in iraq, i still get to go to public libraries, have great roads, have great public transportation etc.  Remove the donut hole, it is much easier to teach us to adjust than it will be to figure out the shortage later....

    I can not believe this is what (5.00 / 4) (#31)
    by masslib on Fri Jun 13, 2008 at 01:29:12 PM EST
    the Democratic nominee is running on.  What a waste of political capital.  I do find it humourus that this is the only option Hillary said was possible vis-a-vis the cap and she was raked over the coals for it.  It's a waste of an opportunity at a time when the Dems should be running on universal health care not the social security non-crisis.  Hillary was right.  You need to go with the Reagan-O'Neil approach.

    I believe Obama equivocated (5.00 / 1) (#40)
    by madamab on Fri Jun 13, 2008 at 01:32:33 PM EST
    on this response during the Philly debate too. Wasn't his cap originally $200,000 but HRC said no, it has to be $250,000 if you are going for that option? I honestly can't remember.

    No, he wanted to lift the cap (5.00 / 2) (#51)
    by masslib on Fri Jun 13, 2008 at 01:36:06 PM EST
    from 102k.  

    Thanks - what I couldn't remember (none / 0) (#90)
    by madamab on Fri Jun 13, 2008 at 01:54:48 PM EST
    was at what point the taxes would resume; either $200,000 or $250,000.

    well (none / 0) (#42)
    by Capt Howdy on Fri Jun 13, 2008 at 01:33:13 PM EST
    we all know I am no Obama fan but I give him credit for talking about this.  the president needs to lead on this and I think the criticism of "forming a comission" was valid.
    a leader needs to lead.  and THEN maybe from a comission.

    I totally disagree. Social security (5.00 / 3) (#49)
    by masslib on Fri Jun 13, 2008 at 01:35:17 PM EST
    is not even in the top ten of serious funding issues.  And, no. a President shouldn't lead on this.  Congress should.  But, no matter, it's a total waste of political capital.  There is no crisis.

    Medicare (5.00 / 1) (#60)
    by madamab on Fri Jun 13, 2008 at 01:39:41 PM EST
    is in bad shape right now, for example.

    Correct. (5.00 / 1) (#66)
    by masslib on Fri Jun 13, 2008 at 01:42:37 PM EST
    Agreed (5.00 / 1) (#113)
    by santarita on Fri Jun 13, 2008 at 02:08:41 PM EST
    I'm much more concerned about medicare than social security.  And as a sometimes reader of Krugman, that's where he thinks the crisis is as well.

    I see this plan as a way of taxing the wealthier individuals.  The reason for the donut hole is just to appeal to a certain demographic - the middle middle class.  

    A truly progressive idea would be to make sure that SS funds are not included in the general budget so that politicians don't get the idea that they can use those funds for anything other than social security.


    Medicare Is Funded Through FICA (none / 0) (#139)
    by daring grace on Fri Jun 13, 2008 at 02:36:33 PM EST

    So I assume if a plan increased "FICA" it means more money to medicare as well, although the percentage of FICA that goes to medicare is less than that to social security.


    you can argue (none / 0) (#53)
    by Capt Howdy on Fri Jun 13, 2008 at 01:37:12 PM EST
    if its a good idea to try to deal with the "crisis" before it actually happens (it certainly is coming) but the truth is we have been bashing politicians for years for not taking this issue on.  
    credit where it is due.

    LOL. I have never bashed (5.00 / 1) (#55)
    by masslib on Fri Jun 13, 2008 at 01:38:25 PM EST
    politicians for not taking on the social security non-crisis.  

    question if you dont mind (none / 0) (#61)
    by Capt Howdy on Fri Jun 13, 2008 at 01:40:06 PM EST
    how old are you?

    Don't know about masslib (5.00 / 1) (#105)
    by RalphB on Fri Jun 13, 2008 at 01:59:14 PM EST
    but I'm 61 and there is no oncoming crisis with social security that getting the current deficit under control won't fix.

    If you did want to expand the financing of SS, why not move it from a payroll only tax to one which also encompasses investment income?  That would be unpopular because income couldn't be shifted from salary to dividends or stock to shield it.


    you got a couple a year on me (none / 0) (#119)
    by Capt Howdy on Fri Jun 13, 2008 at 02:16:49 PM EST
    just to be clear, I am not saying THIS IS WHAT WE SHOULD DO.
    I am not saying that.  ALL I am saying is that I believe he deserves credit for talking about such an explosive subject.
    and I have always thought the cap should be raised.
    those who say it is a republican plot for privatization could be right.  I dont trust Obama out of my sight.  but at least he is talking in public about a subject politicians have feared to tread on for as long as I can remember.  I like that.
    (I know I said I was done but let that be a lesson, never believe anything I say)

    Feared to tread? (5.00 / 1) (#124)
    by masslib on Fri Jun 13, 2008 at 02:22:45 PM EST
    Did you miss both the 2000 and 2004 elections?

    you mean (none / 0) (#134)
    by Capt Howdy on Fri Jun 13, 2008 at 02:32:51 PM EST
    the loooooccck boooooox?
    that didnt go so well did it.  also "talking about it" and actually proposing something is quite different.

    Ding! Ding! Ding! (none / 0) (#136)
    by Grace on Fri Jun 13, 2008 at 02:34:02 PM EST
    I think we have a winner!  

    What's goofy about this scheme to tax the wealthy is that most wealthy people aren't wealthy due to "payroll wages."  The income comes in from investments.  

    When John Kerry's wife revealed her taxes, I think she was earning something like $12K or $24K in payroll income...  So this is how the wealthy get around paying those SS & Medicare payroll taxes.  

    This "donut" is just large enough to encompass, oh, a Congressman or Senator's salary.  I can't think of too many people who earn over $250K in salary.  I'd be willing to bet even Warren Buffett makes less than $250K.  


    Sometimes the obvious is the answer :-) (none / 0) (#154)
    by RalphB on Fri Jun 13, 2008 at 03:09:54 PM EST
    Thus the need for a "commission".  The only way a change to include investment income in the mix would ever fly is for everyone to hold hands and jump off the cliff together.  I doubt even a "commission" would ever propose that for a "solution".

    Yep! Warren Buffett made $100K (none / 0) (#164)
    by Grace on Fri Jun 13, 2008 at 03:46:29 PM EST
    in salary in 2006:

    wikipedia Warren Buffett

    His 2006 annual salary was about $100,000, which is small compared to senior executive remuneration in other comparable companies

    If the top five wealthiest people in this country aren't affected by this change, who is?  


    hello... (none / 0) (#179)
    by tben on Fri Jun 13, 2008 at 04:36:25 PM EST
    the quote you supply gives you the answer.

    Salaries in that range are common for senior executives in many many companies, as well as many doctors, lawyers and other professionals.

    Buffet is an exception in that he makes so much from his investments he doesnt bother taking much of a salary.


    Retiree will not appreciate (none / 0) (#182)
    by Molly Pitcher on Fri Jun 13, 2008 at 04:43:07 PM EST
    investment income having still another tax.  Funds, stocks, and bonds are where their 'other' retirement income is being stashed.  Isn't that what everyone is told to do, invest any extra?  And I know that none of mine is in 'tax-advantaged' vehicles because I didn't get anything to invest till I inherited some--so no IRA's and 401K's.  I just pay my taxes and am grateful I have enough left.

    Gee do ya think? (none / 0) (#187)
    by RalphB on Fri Jun 13, 2008 at 05:18:55 PM EST
    Of course they wouldn't and I don't want my taxes going up either to fix a crisis which doesn't exist.  Talk about fixing Medicare and then we'll talk.

    35. (none / 0) (#65)
    by masslib on Fri Jun 13, 2008 at 01:42:14 PM EST
    about what I thought (none / 0) (#74)
    by Capt Howdy on Fri Jun 13, 2008 at 01:47:13 PM EST
    I never worried much about the SS crisis when I was 35 either.
    it is VERY important to me now and I want something done to keep it solvent.

    To keep it solvent (5.00 / 1) (#82)
    by rilkefan on Fri Jun 13, 2008 at 01:50:09 PM EST
    don't touch it.  It's fine for many decades to come at worst.  This is a Republican-propaganda distraction from important stuff.

    if you dont touch it (none / 0) (#183)
    by tben on Fri Jun 13, 2008 at 04:47:19 PM EST
    then starting in 10 years or so, you will need to raise more money through general revenues to pay off the IOUs, because SS will have to start cashing them in to pay benefits.

    So the question becomes very simple. Which is preferable - raising money through general revenues and then passing it on to SS? OR raising money through payroll tax increases, or cap lifting?

    Whether you "touch it" or not, more money is going to have to move from taxpayer to SS recipient. The only question is whether you raise that money in the most progressive manner (Obama's plan), or under the existing general tax structure.


    The only question (none / 0) (#185)
    by rilkefan on Fri Jun 13, 2008 at 04:57:48 PM EST
    is whether tbills are worthless.  If you like a world where they are, then fine - otherwise it's a problem for the general fund, not for SS.  Obama's plan will bring in a pittance while opening the door for noxious tampering while weakening the strong rhetorical advantage we hold.  Well, a pittance and   some all-important post-partisan and bandaid-applying cred with the pundit class.

    huh? (none / 0) (#186)
    by tben on Fri Jun 13, 2008 at 05:11:44 PM EST
    I dont understand what you are trying to say.

    Tbills are not worthless. As I explained in my comment, the problem IS one for the general fund. But the money is coming out of your and my pockets no matter what. Do you want everyone to pay higher income tax, or do you want the highincome earners to pony up more to SS?

    I dont know what you imagine the "strong rhetorical advantage" is that we hold. All it will get you is higher taxes for everyone instead of higher taxes on those most able to afford it.


    I don't want SS to bear the burden (none / 0) (#191)
    by rilkefan on Fri Jun 13, 2008 at 06:09:25 PM EST
    of taxes that are due to the raiding of the general fund.  Your way of arguing gets SS destroyed.

    SS is popular and trusted.  If the voters get misled into believing it's in crisis, or if the rich (aka the influential) are given reason to dislike it, or if the general Republican rhetoric is adopted, the Dems might lose the battle over one of their signature accomplishments.  We need to argue the true point that the problem is a) the debt, which is largely a Republican legacy and b) health care.  SS is very likely to take care of itself this century, and will continue to serve as a prime example of why the Dems are better than the other guys.


    once again (none / 0) (#196)
    by tben on Fri Jun 13, 2008 at 07:09:02 PM EST
    sorry, maybe I am a bit slow here, but I really dont understand your logic.

    Yes, SS is popular and trusted. Yes it is one of the best things government has ever done. Yes, I will join you (I imagine) and all other progressives in fighting to the death any attempt to privatize or do away with it.

    Its financial setup IS in trouble. Call it a crisis, or resist to the death using that word - thats a silly argument to me. Lets focus on the reality. The system as currently structured will take in less than it needs to expend in a few short years. Fortunatly that was forseen 20 years ago and we have a trust fund built up that will sustain it another 25 years. But after that, it will take in only enought to pay about 70% of benefits.

    Thats reality. Call it whatever you want. IF you want SS to be there for your kids and grandkids, then it makes sense to adjust the financial model so that it is self-sustaining indefinitly.

    All this fear-mongering about privatization is truly mindless, IMHO. NO DEMOCRAT supports it. And Democrats will control Congress for the forseeable future. Obama DOES NOT SUPPORT privatization.

    Even Republicans are wary now, given that they had the perfect situation for them - a recently reelected GOP president, and GOP majorities in both houses, and even then, they couldnt pass privatization. PRIVATIZATION IS DEAD. It is not an issue. Nobody who will have any power supports it.

    Can the grownups now sit down and do what needs to be done to put the system on a permanently sound platform, please?


    OMG, if you are over 35 (none / 0) (#83)
    by masslib on Fri Jun 13, 2008 at 01:50:32 PM EST
    it's completely solvent.  

    I plan to live (none / 0) (#89)
    by Capt Howdy on Fri Jun 13, 2008 at 01:54:22 PM EST
    a very long time

    Well, don't worry. Your checks will (5.00 / 2) (#94)
    by masslib on Fri Jun 13, 2008 at 01:56:09 PM EST
    keep showing up.

    I don't worry about it (none / 0) (#109)
    by CST on Fri Jun 13, 2008 at 02:00:32 PM EST
    I am 23, but then again I don't worry because I just assume I will never see a penny so not much use in worrying.

    Don't worry, (none / 0) (#118)
    by madamab on Fri Jun 13, 2008 at 02:13:52 PM EST
    you will get your share...unless the entire economy collapses, or global warming continues unchecked.

    Well (none / 0) (#123)
    by CST on Fri Jun 13, 2008 at 02:19:17 PM EST
    I don't have that much confidence in our ability to deal with global warming.  Also, one of the ways to deal with it effectively is population control which means social security is screwed since it requires more young people.  Vicious cycle.

    THIS (none / 0) (#122)
    by Capt Howdy on Fri Jun 13, 2008 at 02:18:39 PM EST
    IMO.  this feeling among people you age is the biggest threat to the system.

    this ain't global warming... (5.00 / 2) (#106)
    by p lukasiak on Fri Jun 13, 2008 at 01:59:35 PM EST
    and there is no crisis today, there is no crisis in the foreseeable future (and no, 40 year projections are not the 'foreseeable future' they are merely guesses) and whatever problems there may be with SS in the future will be mere 'problems', not a "crisis."

    You want a crisis...MEDICARE is a crisis.  deal with that.  But stop acting like there is even a problem with Social Security, because they isn't.  PERIOD.


    Indeed, the danger is for Medicare--and universal (none / 0) (#149)
    by jawbone on Fri Jun 13, 2008 at 03:03:46 PM EST
    healthcare and global warming are the two biggies. Medicare is fixed if there's universal healthcare, essentially. Then on to

    Why is Obama so enchanted by messing around on SocSec? His Univ of Chi advisers? Wall Street money raisers? I mean, Wall St is going to desperate to have mandatory private accounts.


    Why is Obama even doing this? (5.00 / 6) (#36)
    by frankly0 on Fri Jun 13, 2008 at 01:30:23 PM EST
    Other than to demonstrate how much less-partisan-than-thou he really is?

    It's all about pretending to go beyond "the usual partisan conflicts" and, with a nobility only he can muster up, solve "real problems" with "hard choices".

    To Heck, of course, with all the delicate political balances that have sustained SS since the day of FDR. And no matter that the problem he is choosing to gin up is far away and very tractable in any case.

    Really, policy for Obama seems like nothing more than the malleable clay he uses to sculpt his own image.

    Of course the Blogger Boyz, like Josh Marshall, who once upon a time knew perfectly well how destructive it was for Democrats to talk about SS being in crisis now will lap up the wondrous solution to the non-existent problem now that it's been pronounced by The Special One.

    The only solution... (5.00 / 3) (#41)
    by p lukasiak on Fri Jun 13, 2008 at 01:33:04 PM EST
    The only solution to any problem that SS might possibly have in the futre is fiscal responsibility and balanced budgets -- which is Clinton's plan.

    Right now, SS benefits are equal to about 4.2% of GDP, and will stay that way until about 2012.  From 2012 through 2032, the percentage of GDP used for Social Security benefits rises in a (neraly) straight line until it reaches 6.2% of GDP in 2032....and that's about where it sits for the next 50 years or so.

    Now, throughout most of this period (until 2029), the Trust fund continues to run an annual surplus... in other words we have until 2029 before we have to start redeeming the debt held by the trust fund.

    Fiscal responsibility means that we have to balance the budget and schedule payment of non-SS held debt so that almost all of it is paid off before 2029.  

    And because the trust doesn't run out of assets until 2042, that means that the economy has 10 years to adjust to spending 6.2% of GDP on social security benefits -- and if we have a balanced budget, that means that in 2043 we'll have sufficient general revenues to continue to pay full benefits to social security by supplementing the SS system with general revenues.  (General revenues will have been used to redeem SS debt so that the SS system can pay scheduled benefits... once that debt is exhausted, we'll have a huge budget surplus.)

    The year figures above get pushed back a year (none / 0) (#88)
    by rilkefan on Fri Jun 13, 2008 at 01:54:05 PM EST
    every year...  And they're based on overly pessimistic projections iirc.

    Employer Match? (5.00 / 1) (#44)
    by AlladinsLamp on Fri Jun 13, 2008 at 01:34:00 PM EST
    Will the employers of those making above $250K be required to match the 6.2% and will the self employed pay the employer portion?

    self employed (none / 0) (#132)
    by DFLer on Fri Jun 13, 2008 at 02:31:50 PM EST
    Always pay the "employer " potion - at every level.

    I meant (none / 0) (#141)
    by DFLer on Fri Jun 13, 2008 at 02:38:04 PM EST
    "Portion", of course, but "Potion" sounds pretty good too!

    Oh, I Understand... (none / 0) (#167)
    by AlladinsLamp on Fri Jun 13, 2008 at 04:02:23 PM EST
    Me, I'm one of the lucky duckies who won't have to pay the extra tax (I wish) but will likely see my benefits reduced 20 years from now.

    But if the answer to my question is yes then Obama will have to sell it to the business community or, if no, then he will have to justify why business will not have to match.

    If the answer is "don't know" then this proposal is spaghetti on the wall.

    Yes or no, this would generate an enormous pile of money that would prove tempting to borrow.


    to be honest, i don't trust the new (5.00 / 2) (#50)
    by hellothere on Fri Jun 13, 2008 at 01:35:41 PM EST
    democratic party on social security. i think right now we need to start warning our legislators that they had better hold the line on it or face our wrath. dissing seniors, giving insurance companies a place at the table ahead of americans doesn' sit well with me. the policies and procedures of the new democratic party leaves me cynical and say show me the money and where you are putting it. after it's there i want to check and make sure it is still there. demand that our legislatures take care of us and not themselves all the time. that's change!

    Bad bad bad (5.00 / 8) (#67)
    by Steve M on Fri Jun 13, 2008 at 01:43:33 PM EST
    This does NOT help secure the long-term future of Social Security.  In fact, it HURTS Social Security in the long term.

    Why?  Well, right now, Social Security is running a surplus while the general fund is running a huge deficit, thanks to GWB.  What this means is that the SS surplus gets paid into the SS Trust Fund, and then it gets immediately borrowed by Congress to meet general obligations.  In return, Congress deposits U.S. Treasury bonds in the SS Trust Fund, which represents its long-term commitment to pay back the borrowed funds and keep SS solvent.

    That's fine as far as it goes, because if we're going to run a general fund deficit, we might as well borrow the money from ourselves rather than China.  Despite all the rhetoric about Congress "raiding" the Trust Fund, the reality is that we'd be stupid to leave it just sitting in cash, earning no interest, and U.S. Treasury Bonds are the safest investment you can make.

    But one way or the other, there is a crisis in the general fund that vastly exceeds the trumped-up problems that supposedly exist with Social Security.  We all know the Bush deficits are unsustainable in the long run, and we know it's going to take a lot of pain to get back to balanced budgets and start paying off the debt.

    And every dollar that Congress borrows from the SS Trust Fund makes it that much harder to bring our overall budget back into balance.  In other words, because all those U.S. Treasury bonds need to be repaid, all we're doing with this borrowing scheme  is increasing the pressure on the general fund to repay those obligations someday.  The more money raised by SS taxes, the more borrowing will take place; and the more borrowing, the more long-term pressure on the general fund.

    To boil it down, if we were running a deficit in Social Security right now, then increasing the payroll tax would help relieve that deficit.  But since there's no deficit right now, all we're accomplishing is helping out the general fund in the short term, while increasing the magnitude of the long-term "crisis" that will ensue if Congress doesn't find a way to pay off its obligations to the SS Trust Fund.

    Personally, I find it dishonest to claim that we're raising taxes to help strengthen Social Security when the economic reality is that we're only helping the general fund and not Social Security; however, I think 99% of the people who talk about raising the payroll tax for this reason don't actually understand any of this.  So I'm not calling anyone a liar, but regardless, now you know.

    Well said (5.00 / 2) (#86)
    by elmey on Fri Jun 13, 2008 at 01:52:25 PM EST
    thanks!  This should be an elementary understanding for any Democrat.  For Obama to go this route is disturbing.

    The problem is not now (none / 0) (#174)
    by Jlvngstn on Fri Jun 13, 2008 at 04:17:41 PM EST
    the problem is well documented and not often disputed that in 2018 we will be paying out more than we are taking in.  When SS was started there were 43 contributors to 1 recipient (and life expectancy was less than the retirement agae), we now have a ratio of 3-1 which is still manageable.  I wouldn't call it a crisis but things become crises when they are ignored and dealt with "by the next administration".  We are living considerably longer (nearly 20 years longer) hence benefits are lasting considerably longer and the baby boomer retirements in 2018 through 2025 will have an enormous swing in the ratio to the negative.  Under this taxation system, those of us in the upper 5% of the income earners in the country will not receive a proportionate drawback when we retire which is the crux of the argument from the 5% as the program was designed to be equitable for all relative to payment and distribution.  I don't disagree about the borrowing but that is a separate argument relative to fiscal responsibility.  As it stands Defense, Medicaid and SS count for more than 50% of the federal budget and in order to cut to balance the budget where do you start? you start with a rapid withdrawal from Iraq.

    You have to make a choice (5.00 / 1) (#177)
    by Steve M on Fri Jun 13, 2008 at 04:28:25 PM EST
    If Congress were to look under the sofa cushions tomorrow and find an extra billion dollars, would they be better off (1) putting it in a rainy-day fund in case Social Security needs it in 2018, or (2) putting it towards getting rid of the general fund deficit today?  The key is realizing that "dealing with Social Security now" is not some cost-free option; if we raise taxes in order to shore up the rainy-day fund, that's money we could be using for a more important purpose, like restoring discipline in the general fund or fixing Medicare.

    There's lots of common-sense attitudes about Social Security that are just plain wrong, like the idea that it will be cheaper to fix if we do it right now.  Actually, it's not one penny cheaper.  And, for your information, the projected dates for Social Security's long-term insolvency are, in fact, hotly disputed.  It's entirely possible that we could do nothing at all about Social Security and it would NEVER run out of money.


    I don't think it would be cheaper to fix now (none / 0) (#178)
    by Jlvngstn on Fri Jun 13, 2008 at 04:31:40 PM EST
    and I wholeheartedly agree that there is a billion or two under a sofa seat, but I do not agree that we should wait to address the issue.  I would concede that a more reasonable argument would be to tax the upper 5% to get us out of debt and then move that tax to SS to insure a surplus moving forward, but I do not agree with waiting.  Building a reserve (that should be untouchable and to your argument it never is) is always better than waiting to address it game time.  

    after i type the above (none / 0) (#181)
    by Jlvngstn on Fri Jun 13, 2008 at 04:40:33 PM EST
    it occurs to me that we should have a war tax that is created whenever we go to war and it is applied to the upper 10% of society as I would imagine that the upper 10% of society is the least represented in the military rank and file.  It is a good way to ask everyone to do their share.  I would imagine that if there were a sizable tax chunk coming from the upper 10% for as long as the war may last there might be a different look at when and how long we go to war.

    I don't get it (none / 0) (#184)
    by Steve M on Fri Jun 13, 2008 at 04:52:32 PM EST
    If we raise taxes today, we either stash away the money in a rainy-day fund where maybe it helps Social Security 20 years from now, or we "wait" and use it to fix more urgent problems like the budget deficit and Medicare right now.  I can't even tell which one you want us to do, but we do have to pick one.

    Seems to me it's just defending (none / 0) (#188)
    by RalphB on Fri Jun 13, 2008 at 05:22:30 PM EST
    the indefensible on real economic grounds, because it's an Obama proposal.  I agree with Krugman, this doesn't make sense.

    no (none / 0) (#200)
    by Jlvngstn on Fri Jun 13, 2008 at 09:03:57 PM EST
    that is not accurate, we were having a reasoned discussion and then you poop in your mouth.  Steve's argument is that it is not in crisis and my argument is that it will start to be in deficit in 2018, which is well documented.  Raising taxes to prevent future crises is important, but dealing with the deficit as it is our 3rd largest expenditure would be a more appropriate use of the money.

    i thinkthe priority is the budget (none / 0) (#198)
    by Jlvngstn on Fri Jun 13, 2008 at 08:45:05 PM EST
    you are correct.

    but the tax moves to ss (none / 0) (#199)
    by Jlvngstn on Fri Jun 13, 2008 at 08:59:26 PM EST
    fund as soon as the budget is under control

    oh yeah (none / 0) (#176)
    by Jlvngstn on Fri Jun 13, 2008 at 04:19:46 PM EST
    the interest on the nat'l debt is the third highest expense currently...

    Atrios explains why Obama's wrong (5.00 / 5) (#70)
    by Dan the Man on Fri Jun 13, 2008 at 01:44:00 PM EST

    "There. Is. No. Crisis."

    "The crisis "frame" was one imposed by the Villagers on the entire debate during the 2005 debate, but it's also a
    factual claim with no basis in reality."

    "More than that, any politician who really thinks that "fixing" Social Security is some sort of top priority is completely wrong. This isn't a Right/Left thing, it's a reality thing."

    "In other words, we need to increase the regressive payroll tax so that we don't need to raise other taxes. And we're doing it to "save" social security.

    This is the con, laid out clearly for all to see. This has nothing to do with "saving Social security" and everything to do with increasing the regressivity of the tax code."

    But now that he's an Obama blogger, I expect he's changed his mind on this issue.

    Heh. (none / 0) (#150)
    by jawbone on Fri Jun 13, 2008 at 03:04:50 PM EST
    Just went over to Eschaton--Atrios is sort of (none / 0) (#151)
    by jawbone on Fri Jun 13, 2008 at 03:07:54 PM EST
    against, but equivocating. Then saying, maybe, it's not good.

    Watch that space.


    OMG, Democrats in Congress (5.00 / 3) (#92)
    by masslib on Fri Jun 13, 2008 at 01:55:15 PM EST
    must be so disillusioned.  Jesus, after finally ending this debate, now they have a fricken Democrat drumming it up.  There are so many worthwhile debates in this election.  Social Security ain't one.

    Donut - why? (5.00 / 1) (#93)
    by zebedee on Fri Jun 13, 2008 at 01:55:17 PM EST
    It's difficult to see any logic or fairness in the donut principle. It seems just a political expediency. Why not raise the same extra amount by starting SS later? For example, everyone pays 6.2% on amounts over $50K or whatever the right starting amount is. If the principle is that that those earning more should contribute more, the donut makes a mockery of that.

    The current scheme says everyone pays around $6k if they can afford it (with the assumption that you need to have taxable income of $102k for this to be the case). Everyone below that pays less at a fixed 6.2%. way it would work is that everyone up to $102K pays 6.2%. If that's the right principle but it doesn't yield enough, they should increase the 6.2% rate. If the principle is wrong, change it to make those earning more contribute more but in a gradual way (like the standard federal earned income tax).

    The donut way has everyone paying 6.2%, this trends down towards 2.48% as the taxable income trends to $250K, then starts treading back towards 6.2% above $250K. So even at $500k it's only around 4.3%. So what's the principle here?

    I agree. (none / 0) (#115)
    by madamab on Fri Jun 13, 2008 at 02:09:28 PM EST
    Why don't we just say, "Look, everyone has to pay it - it's a social safety net so that old people and disabled people don't starve to death. Do you want these people to starve? Do you? Why do you hate old and disabled people?"

    Then, we tax the poorer at a lower rate, and the richer at a higher rate in order to get the income stream we need.

    Everyone participates because everyone belongs to a society. No more of this "Screw you, I've got mine" Libertarian cr@p.

    It's all a matter of framing. I don't see Obama taking control of it here.


    Political expediency (none / 0) (#120)
    by zebedee on Fri Jun 13, 2008 at 02:17:48 PM EST
    If this had come from anyone other than Obama (snark) I would have thought this really was just political expediency, trying to pander to his base. The real middle classes are unaffected by this. I guess a lot of the latte liberals fall in the 102k-250k range that he lets off the hook.

    No. No. No. (none / 0) (#130)
    by tamens on Fri Jun 13, 2008 at 02:29:55 PM EST
    Its not an "entitlement" package, its the social safety linch pin of the New Deal.  We turn it into an entitlement program, and 30 years from now pictures of seniors in cadillacs will be used to bludgeon the program out of existence.

    Its not welfare, and its not in trouble.  I agree with the above posters that the same is probably not so true for Medicare.


    I don't think we're disagreeing here. (none / 0) (#135)
    by madamab on Fri Jun 13, 2008 at 02:33:25 PM EST
    Are you saying no to Obama or no to me?

    Because I'm saying it's a social safety net and not an entitlement program.


    Call Me Crazy (5.00 / 1) (#110)
    by STLDeb on Fri Jun 13, 2008 at 02:02:26 PM EST
    Sorry I don't get to post here a lot, it's been crazy at my job & home too.  I've enjoyed reading the posts/comments though!

    Okay, call me crazy, since I'm a republican, but I believe in raising or totally doing away with the salary cap on social security.  I've thought this for a long time.  

    I'm sorry if you have to be "burdened" with more taxes coming out of your paycheck for the entire year.  I mean, please, if you make over $250K you can afford to pay into SS.  


    So, he's going to roll back the tax cuts (5.00 / 1) (#117)
    by Anne on Fri Jun 13, 2008 at 02:11:56 PM EST
    on people at higher income levels, and now he wants to put a 6.2% Social Security tax on those same people...there's something about that that just screams a "tax and spend" ad from the GOP.

    I also have some concerns that given Obama's gift for compromise and reach-out, I sense a vulnerability there to the importunings of the privatization crowd - and you can be sure those people will not need a whole lot to get more than their foot in the door.

    Yes, I know anything like this has to get through the Congress, but there seem to be enough people in Congress who support Obama that I fear there will not be a solid bulwark against the inevitable bipartisan blather.

    As for him seeming to say two different things - well, there always has to be something for everyone, so just take your pick - you won't be wrong no matter which side you argue for or against!

    He's proposing a donut hole? (5.00 / 1) (#128)
    by catfish on Fri Jun 13, 2008 at 02:29:00 PM EST
    That worked so well for Medicare Part D. I swear, does Obama read newspapers?

    haha (5.00 / 1) (#153)
    by dogooder on Fri Jun 13, 2008 at 03:09:34 PM EST
    (I think he means he will ask Congress to pass such a law.)

    Thanks for the clarification!

    Bloody hell. (5.00 / 4) (#172)
    by OrangeFur on Fri Jun 13, 2008 at 04:13:53 PM EST
    Why on earth would a Democrat propose something like this? It manages to do all of the following:

    1. Give credence to the false Republican meme that Social Security is in "crisis". It is not. Medicare may be in crisis. The general budget may be in crisis when it comes time to pay back the SS trust fund. But SS is NOT in crisis. We spent all of 2005 fighting this one. This by itself should disqualify any such proposal.

    2. Turn SS from a broad-based popular social insurance program to a less popular redistribution system from the wealthy to others. What has kept SS in its cherished place is that everybody feels they get treated fairly. We don't want it to be a welfare program.

    3. Deepen the future problem when it comes to repaying the SS trust fund. Raising payroll taxes now will only increase the amount of money the general budget can borrow, and thus make that problem worse when we have to deal with it.

    This idea is just terrible.

    Obama not talking about cutting SocSec benefits (5.00 / 1) (#189)
    by chew2 on Fri Jun 13, 2008 at 05:28:03 PM EST
    He was talking about limiting when corporations can cut pension benefits by plan terminations, bankruptcy and other devices.

    At least that is my reading of the AP news article, which is admittedly ambiguous.  Note the words "other retirement issues" below:

    "Obama, speaking on other retirement issues, 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."


    Getting Closer (5.00 / 1) (#195)
    by CoralGables on Fri Jun 13, 2008 at 07:08:28 PM EST
    Part way to the proper solution. There should be no donut hole at all unless it's those making under 20,000. Everyone else should pay on all earned income with no cap whatsoever. He is halfway home. It's an excellent start.

    Ding, Ding, we've got a winner. (none / 0) (#204)
    by Radix on Fri Jun 13, 2008 at 09:55:24 PM EST
    Also, if this were to be implemented, I'll bet we could reduce the percentage taken by 1%.

    Because there are no facts, there is no truth
    Just data to be manipulated...

    Don Henly-Garden of Allah


    In the meantime, Bill Richardson's star is falling (none / 0) (#10)
    by SunnyLC on Fri Jun 13, 2008 at 01:17:25 PM EST
    He won't be the VP, apparently...so who knows about Hispanic voters?

    Bill Richardson's Star is Falling with a BIG THUD (Not on VP Shortlist, State Legislators FED UP with Him)


    Mr. Richardson has pushed through a spaceport which brings higher sales taxes on a poor area...lots of bitterness on that score

    every so slightly off topic (snark) n/t (none / 0) (#91)
    by DandyTIger on Fri Jun 13, 2008 at 01:55:03 PM EST
    darn, I thought ever, then I typed every (none / 0) (#96)
    by DandyTIger on Fri Jun 13, 2008 at 01:56:25 PM EST
    Bwhahahaha! (none / 0) (#121)
    by LoisInCo on Fri Jun 13, 2008 at 02:18:02 PM EST
    I mean, oh gosh! Poor man!

    His plan (none / 0) (#11)
    by Ga6thDem on Fri Jun 13, 2008 at 01:17:34 PM EST
    sounds dumb to me. People under a certain amount pay the tax and people over a certain amount pay the tax while a select group in between is let off the hook? Whoo boy, is this an electoral suicide mission or what?

    The problem is... (5.00 / 3) (#23)
    by madamab on Fri Jun 13, 2008 at 01:24:16 PM EST
    the median income for a family of four in America is around $50,000.

    That's the middle class.

    They still have to pay SS tax.

    I dunno. I think that everyone should have to pay it. There should be no exemptions. A lot of people who have high incomes today, may still need or get SS when they retire.


    U are Right (5.00 / 1) (#57)
    by BarnBabe on Fri Jun 13, 2008 at 01:38:44 PM EST
    Many of us single people would love to be in the $102k a year annual income. I wrote before, I DO NOT Like THE GAP or donut hole. If it is a donut hole, make it $30k to $75k if you want to make it for the middle class. Tier it with percentages but make it for all. Undo the ceiling cap.  

    I do not think raising the cap (none / 0) (#152)
    by Virginialass on Fri Jun 13, 2008 at 03:07:56 PM EST
    Would be good for the economy. My family sit between the 102 -250. My husband stops getting SS Tax taken out of his paycheck around September. It is taken out of my check the whole year since I make under 100K. Our family has come to rely on that extra 500-800 a month to pay for the heating oil in our house and Christmas..... I am sure we could make do but our budget is pretty set and we would have to cut some spending. I don't think this economy could handle losing that amount of money circulating around.

    Social Security needs to be secured but I really do not want to put more money into the incenerator. Personally, I am for not raising the cap - for anybody.


    Okay (5.00 / 2) (#27)
    by Ga6thDem on Fri Jun 13, 2008 at 01:27:17 PM EST
    then by your definition he's taxing only the rich and the poor? The doughnut hole was what W. has used. I think this is a really poor plan because it's going to be hard to sell. It's not like Obama has garnered already great support from working class voters but this will hurt him even more. The message here is that: latte liberals should be exempt from paying into social security while the rest of you chumps should. While it "might be good policy" politically it's suicidal.

    He is not exempting anyone from paying into SS (5.00 / 1) (#116)
    by r15 on Fri Jun 13, 2008 at 02:09:48 PM EST
    Do you even understand his proposal?

    Right now, everyone pays Social Security taxes on their income, up to $102,000. If you earn more than that, you don't pay Social Security taxes on the amount above that.

    What Obama is proposing is that people who earn more than $102,000 should pay Social Security tax on that income - but only on any amount they make that is above $250,000. So people making between $102,000 and $250,000 will be exempt from additional taxes under Obama's proposal - but they will still pay the existing Social Security tax on their income up to $102,000.

    To put it as simply as possible, under Obama's proposal, people making more than $250,000 will have their Social Security taxes increased, and everyone else will pay the same amount that they're paying now. No one will be exempt from paying Social Security tax.


    Do you (none / 0) (#163)
    by Ga6thDem on Fri Jun 13, 2008 at 03:32:00 PM EST
    realize that certain groups are going to get a lower percentage than others right? Yes, I understand exactly what you are saying. If you make 150,000 dollars you are going to pay a lower percentage than someone making $50,000. Now, I know that it's the way the existing system is set up but putting the donut hole in there makes it seem like a select group somehow gets preferential treatment.

    My socialist lefty solution (none / 0) (#45)
    by madamab on Fri Jun 13, 2008 at 01:34:05 PM EST
    would probably be even more politically unpopular. ;-)

    Good Policy, Good Politics (none / 0) (#180)
    by Politalkix on Fri Jun 13, 2008 at 04:40:11 PM EST
    This proposal will be liked by many middle class Independents and Republicans who vote Republican, not because of social or cultural reasons, but solely for reasons linked to the wallet. A lot of Independent and Republican voters have household incomes between 102K-250K. Many of the younger Independent and Republican voters are also absolutely convinced that they won't get social security benefits when they retire because SS will go into insolvency by that time.
    The beauty of this proposal is that it does not tax households making less than 102K anymore than what they are used to paying.

    He is Taxing them (5.00 / 1) (#127)
    by BackFromOhio on Fri Jun 13, 2008 at 02:28:40 PM EST
    On up to $102,000 and then on wages above $250,000 (call this upper echelon middle or upper class, depending on where you live or more still, your perspective); point is, everyone is taxed on any wages up to $102,000; and anyone with wages above $250,000 would pay more.

    It makes a ton of sense (none / 0) (#25)
    by magster on Fri Jun 13, 2008 at 01:26:34 PM EST
    Social Security is a safety net for some of society's most vulnerable, and the over $250,000 per year crowd is most able to absorb a small tax increase to keep the safety net in place long-term.

    It beats the crap out of privitization unless you're making over $250,000, rooting for McCain or both.


    I don't disagree (5.00 / 1) (#30)
    by andgarden on Fri Jun 13, 2008 at 01:28:37 PM EST
    the quibble I have is that there's really not need for this right now. Social Security is solvent and will remain so. Even if it were not solvent, the checks would keep arriving.

    This is (none / 0) (#35)
    by Ga6thDem on Fri Jun 13, 2008 at 01:30:15 PM EST
    the one thing that he should have kept it vague on. Everything else he has done that's vague is largely a problem but putting out this plan is worse than none imo.

    You (5.00 / 1) (#32)
    by Ga6thDem on Fri Jun 13, 2008 at 01:29:14 PM EST
    are making a mistake here. He's letting a group off the hook while every body else has to pay. It's political suicide.

    No he is not (none / 0) (#157)
    by Virginialass on Fri Jun 13, 2008 at 03:14:25 PM EST
    My family makes a little over 200K a year and we pay on the first 102K (actually we pay on the first 140K because they take it out of my check the entire year) and we will continue to pay on it. When we retire we will hopefully get what we paid into SS. If he raises the cap then that will mean less money in the economy for consumers to spend and invest. Then SS will have to pay out more to the people who paid more into it. I am not sure how this helps the situation.

    We need to exit Iraq and start balancing the budget.


    But you (none / 0) (#161)
    by Ga6thDem on Fri Jun 13, 2008 at 03:26:18 PM EST
    get to pay less of a percentage than someone who makes $50,000 right? That's my point.

    Personally, I think he's making a mistake with this right now. He should have just let this alone.


    The point is (none / 0) (#193)
    by Virginialass on Fri Jun 13, 2008 at 06:27:40 PM EST
    SS is a mandatory savings account. You get back (hopefully) what you pay in. The rich do not need this account. They have to pay in despite the fact and they will get their SS check just like the rest of the seniors when the time comes. For example I work PT for about 40K a year and pay the full amount through the month of Dec. They stop collecting SS on my husbands paycheck in Sept. When I get that nice little statement in the mail - the amount of my ss I will collect per month is considerably lower than the amount my husband will get. You pay less you get less. The rich don't want to pay more because they don't need the account to survive. They would rather put it in investments, spend it now, or give to charity. My family pays the max and we will get the max payout when we retire. I would rather take the extra money and invest in our 401K's or portfolio. I don't want to burn my money by giving more to SS.

    It makes no sense (5.00 / 2) (#73)
    by elmey on Fri Jun 13, 2008 at 01:46:27 PM EST
    It's unneccessary, overcomplicated, and undermines support for social security.
    Social security is not a welfare program, it is an insurance program that benefits all.  The donut hole makes no sense, and look suspiciously like the first step on a road to privatization.

    One Nitpicky Point (none / 0) (#98)
    by The Maven on Fri Jun 13, 2008 at 01:56:42 PM EST
    While it is true that those making over $250K are generally in a very good position to absorb this proposed increase, it's hard to characterize 6.2% as "small".  A single taxpayer earning between $250-350,000 is paying a marginal tax rate of 33% for each additional dollar of earned income.  Essentially moving that figure up to 39.2% from its current level is fairly sizable, no matter how affordable it might be.

    yes (none / 0) (#158)
    by Virginialass on Fri Jun 13, 2008 at 03:19:32 PM EST
    That is just more money taken out of the economy. The rich folks will balance it out by cutting back on donating to charity ect.... They will have less to spend and invest - and that hurts everyone. I know it is easy to hate the rich man but he does employ people and spends money to help keep the economy humming. They don't hide the money under their mattresses.

    You've got it backwards (none / 0) (#175)
    by CST on Fri Jun 13, 2008 at 04:18:07 PM EST
    Why are people employed? - because they work for a company that makes money.

    Why do companies make money? - because they sell stuff to people.

    What happens if the middle class has no money? - they can't spend it so companies don't make money.

    Give money to the masses, they spend it, it goes up the chain.  Trickle down economics is a false joke.  People can't "create jobs" unless they have something to sell.  They can't sell unless people can afford to buy.

    As for this: "know it is easy to hate the rich man but he does employ people and spends money to help keep the economy humming." The same money in the hands of the lower/middle classes would be spent much quicker and would help the economy much more.


    as far as will it sell (none / 0) (#12)
    by Capt Howdy on Fri Jun 13, 2008 at 01:17:43 PM EST
    thats a good question.  it will be interesting to see.  it will be a problem for him IMO but he is going to have other bigger problems.

    I don't like the $102 to $250 gap (none / 0) (#18)
    by BarnBabe on Fri Jun 13, 2008 at 01:21:39 PM EST
    Under his plan, you wouldn't pay SS taxes on amounts between $102k and $250k. But over $250k, and you pay
    This would leave a bunch of loopholes for people. Aw, drop one more thing off at Salvation Army to get to $249,999? No, if he wants to uncap, which is a good idea, he will have to percentage it out at income levels. If it 6.2% now, then at $102, it is 5.2 and at 250 up, 4.2. Only fair way than to leave that gap.

    Also, if you uncap the percentage and ceiling, you will still have to cap the payout. I mean, you can't have some people getting $50k a month while the rest of us would only be getting $1800. So that would have to be tiered also. I see where he is trying to get to but his policy seems to be the proverbial cart.

    Umm.... (5.00 / 2) (#39)
    by Jerrymcl89 on Fri Jun 13, 2008 at 01:32:22 PM EST
    ... it's not like the $249,000 guy doesn't pay the tax. He only pays it on the first $100,000.

    That being said, I think this proposal makes Social Security too redistributive, which is something that has been resisted since it's inception, and would make it more of a target for people who want to scrap the existing system and privatize.


    it seems to me (5.00 / 1) (#59)
    by Capt Howdy on Fri Jun 13, 2008 at 01:38:55 PM EST
    there are two choices.
    fiddle with the cap or test means.

    I am curious why (none / 0) (#131)
    by vigkat on Fri Jun 13, 2008 at 02:30:43 PM EST
    You are so adament about instituting means testing. You have almost insisted upon it numerous times in this thread.  In my view, that would reduce the SS program to a form of welfare.  It's a hideous idea, one to which I am extremely opposed because it's exactly contrary to the guiding principles underlying the Social Security program.  Do you also propose means testing for Medicare?  And how do you see the means testing working, exactly?

    I am not (5.00 / 1) (#137)
    by Capt Howdy on Fri Jun 13, 2008 at 02:34:21 PM EST
    I am saying there are two choices.  means testing and lifting the cap.
    of the two lifing the cap is the better option.

    See, I feel like (5.00 / 1) (#147)
    by madamab on Fri Jun 13, 2008 at 02:55:27 PM EST
    Hillary's proposal is the best one...let's focus on reducing the deficit and raise taxes on the wealthy again. After that, if Social Security REALLY needs adjustment in some way, then we can look at it.

    But the other economic problems are more pressing, IMHO.


    this holding my nose because that's the (none / 0) (#58)
    by hellothere on Fri Jun 13, 2008 at 01:38:55 PM EST
    best we can do is so well holding your nose. why hold your nose? is there a smell there you don't like? and what do you plan to do about it? keep on giving politicans a vote for not doing anything for us? i have to tell i personally am angry and i don't plan to go along to get along. but that's me. and to the so called young voters who think "that's them and i'm me" better think again. we are all on this boat together. if one group sinks, so do the rest.

    Makes me laugh (none / 0) (#76)
    by TeresaInSnow2 on Fri Jun 13, 2008 at 01:47:28 PM EST
    Businesses will be paying their $250K/yr employees in stock options now, etc.

    Small businesses, same thing, but in the form of return of capital.

    Other businesses will move overseas etc.

    Sounds good, but rich folks are masters at avoiding taxes.

    last comment (none / 0) (#97)
    by Capt Howdy on Fri Jun 13, 2008 at 01:56:35 PM EST
    because I hate being in the position of defending Obama.
    my last word is he deserves credit for talking about this.  look on the bright side, all those democratic congressmen and senators he is supposed to help elect will be more than enough to reign him in, right?

    He gets zero credit from me. (5.00 / 2) (#107)
    by masslib on Fri Jun 13, 2008 at 02:00:01 PM EST
    I am simply disgusted that he would make this a campaign issue.

    good! (none / 0) (#111)
    by Capt Howdy on Fri Jun 13, 2008 at 02:03:12 PM EST
    (sorry, last one. for sure)

    Why get credit for playing in the R's sandbox? (5.00 / 1) (#155)
    by jawbone on Fri Jun 13, 2008 at 03:13:33 PM EST
    What he needs to address is funding Medicare--and fighting global warming.

    There is no need to rile up the SocSec waters right now: There are real priorities. He's playing political games, I think.

    And, again, why is he doing this? Issue was settled--maybe he just sees this as easier than getting into the medical area, which I guess Medicare would take him into.


    All Those Reps And Senators Will Be Enough (5.00 / 1) (#173)
    by MO Blue on Fri Jun 13, 2008 at 04:15:45 PM EST
    to reign him in? If Obama is successful in consolidating ALL Democratic funds under his umbrella, do you really think that the pols who will be beholden to him for money will reign him in?

    I don't.


    not sure he does mean he'll ask congress (none / 0) (#104)
    by DandyTIger on Fri Jun 13, 2008 at 01:59:01 PM EST
    either by the way. Dubya has turned the executive branch nearly into a dictatorship position. I'm not sure anyone getting into that office would back off of that power. And besides, it's a movement, who in congress could possibly say no to him. OK, that was a bit of a snark. Must be off the meds again. :-)

    Will Congress be moved to Chicago? If so, (5.00 / 1) (#156)
    by jawbone on Fri Jun 13, 2008 at 03:14:16 PM EST
    anything is possible!

    the success of the program is tied to (none / 0) (#112)
    by thereyougo on Fri Jun 13, 2008 at 02:07:08 PM EST
    the workers and with gas prices being high,and people staying home, the birth rate should go up to maintain the workforce for future retirees.This is the key to the system's future and what Europe has been having problems maintaining because their birthrate is low, jeopardizing their version of retirement benefits.

    I do like the idea, but I'm not sure that raising the cap should be called welfare. Heck some see it as welfare already, because its new workers that fund the program.

    If McCain gets in, he would like to privatize it, but doesn't call it that, but it is. He's trying to pull a scam. I hope people don't fall for it.

    How the heck do you sell this? (none / 0) (#126)
    by ineedalife on Fri Jun 13, 2008 at 02:27:16 PM EST
    We are going to tax poor and rich people but not the middle class. Or the upper half of the middle class. And the lower half of the upper class. Yeah, we will cut them some slack too. God knows they need it. This makes no intuitive sense.

    Just extend the existing cap on social security and extend the AMT floor up to a sensible level to offset it. It is then a wash to the affected population. Buy one or two less stealth bombers or aircraft carriers to pay for any shortfall.

    As madamab pointed out earlier (5.00 / 2) (#138)
    by DFLer on Fri Jun 13, 2008 at 02:36:12 PM EST
    102,000 to 250,000 is NOT middle class income.

    nope (5.00 / 1) (#140)
    by Capt Howdy on Fri Jun 13, 2008 at 02:37:19 PM EST
    it average Obama voter income.

    LOL! (none / 0) (#144)
    by madamab on Fri Jun 13, 2008 at 02:49:16 PM EST
    Depends where you live. (5.00 / 2) (#142)
    by ineedalife on Fri Jun 13, 2008 at 02:42:57 PM EST
    But that wasn't the essential point. It seems like a real tough sell because it is not intuitively obvious to most people. It reeks of bamboozlement and hoodwinking.

    well how about the USA (5.00 / 1) (#145)
    by DFLer on Fri Jun 13, 2008 at 02:49:30 PM EST
    for where you live!

    I agree about the confusion and bamboozlement factor. And calling this a break for middle-class, at those $$levels, will really be confusing and smack of BS for families still trying to achieve the average of $50,000.00 And that is MOST of us.


    Good For Obama. Now... (none / 0) (#129)
    by pluege on Fri Jun 13, 2008 at 02:29:48 PM EST
    how about a hefty increase in the estate tax.

    History says no. (none / 0) (#133)
    by alsace on Fri Jun 13, 2008 at 02:32:07 PM EST
    The Greenspan Commission's idea to pre-fund the deficit created the illusion of rescuing SS while actually giving the politicians billions in SS taxes from the middle class which they then passed out as tax cuts to the moneyed class.
    Maybe for their next act, the candidates can resurrect the "lockbox."  They need to store all those IOU's somewhere safe.

    too big a target n/t (none / 0) (#148)
    by rilkefan on Fri Jun 13, 2008 at 03:01:24 PM EST

    was in reply to deleted ad hom, never mind n/t (none / 0) (#168)
    by rilkefan on Fri Jun 13, 2008 at 04:04:52 PM EST
    Obama's Comment (none / 0) (#192)
    by creeper on Fri Jun 13, 2008 at 06:19:24 PM EST
    Sen. Barack Obama says if elected, he will require people who make over $250k a year to pay FICA (social security) taxes on the amount in excess of $250k.

    speaks volumes about his ego.

    (I think he means he will ask Congress to pass such a law.)

    I think you're giving him more credit than he deserves, Jeralyn.

    I thought it was a good idea at first, (none / 0) (#206)
    by sallywally on Fri Jun 13, 2008 at 10:30:08 PM EST
    but didn't know about the donut hole, or the business about having to pay out much larger amounts to rich folks who had paid a lot more in (duh).

    Actually, it sounds a lot like we still don't know what he stands for, while we do know what Clinton would do.

    Tiresome. I'm glad she didn't surrender her delegates to him.

    Why not all above 105 000 (none / 0) (#207)
    by allpeopleunite on Sat Jun 14, 2008 at 08:25:28 AM EST
    Why is he capping the tax at 105 000. Is there something I'm missing, why do those people get away with not paying anything?