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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