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Obama Kisses Billions Goodbye
June 18, 2008 7:53 PM
ABC News' Teddy Davis, Sunlen Miller, and Gregory Wallace Report: Sen. Barack Obama, D-Ill., outlined a Social Security plan last week that helps inoculate him against Republican charges that he wants to hike payroll taxes on the upper-middle class. But the proposal would raise far less revenue -- $847 billion less over ten years -- than an idea he touted in an Iowa newspaper last year when he was seeking the Democratic nomination.
The substantial revenue difference between Obama's 2007 idea and his 2008 plan will make it harder to shore up the federal retirement program.
Obama's proposal, which he offered Friday in Columbus, Ohio, would impose Social Security taxes on income above $250,000 per year. He would continue to exempt income between $102,000 and $250,000 from Social Security taxes. Prior to Friday, Obama had kept open the possibility that he would impose the 12.4 percent Social Security tax on income as low as $97,500, the annually adjusted ceiling in place in 2007.
At present, income subject to Social Security taxes is capped at $102,000 per year. Eliminating that cap and imposing the Social Security tax on all income, as Obama suggested last year, would have raised $1.5 trillion over ten years, according to figures provided to ABC News by the non-partisan Tax Policy Center.
Exempting income between $102,000 and $250,000 from higher Social Security taxes and imposing it only on income above $250,000 as Obama formally proposed last week, would raise $629 billion. The net result is that the plan Obama unveiled last week would raise $847 billion less than the idea he floated last year.
"[A]ssuming that all of the additional revenue goes into the Social Security trust fund and benefits would not rise for high earners, the proposal would close less than half of the trust fund’s long-run deficit," writes Len Burman, the director of the Tax Policy Center.
Burman also warns that Obama's proposal could have the unintended consequence of providing an "enormous incentive" to those making more than $250,000 per year to "hide income from the IRS or to make earnings look like capital gains (which Obama would continue to tax at far lower rates than other income) or business profits (which are subject to income tax but exempt from payroll tax)."
While the proposal Obama outlined last week is not as far-reaching as the idea he floated during the primaries, he still has gone much farther than Sen. John McCain, R-Ariz., who has not offered any specific measures for bringing future Social Security revenues in line with outlays.
June 18, 2008 in Kucinich, Dennis | Permalink | User Comments (138)
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A Muslim until he was 20? Where do people come up with these fantasies? I ask where, but I know why--they don't want to say "I hate him because he's black" so they have to come up with this BS.
Posted by: Gary Nowlin | Jun 18, 2008 9:24:40 PM
I have no faith in either party to bring about changes necessary to salvage SS.
Like energy they won't do a damn thing until it is too late.
Posted by: Thinking | Jun 18, 2008 9:25:42 PM
Obama knows nothing about much of anything. He gives speeches without substance.
He is embarrassing to the American people.
Posted by: Rick from Pa | Jun 18, 2008 9:32:24 PM
The fool Obama has changed his tune so many times. How could anyone ever believe him? Enough already.
Posted by: ThinkHarder | Jun 18, 2008 9:35:38 PM
Personal message for:
Gary Nowlin
Please go to this web site and learn more about Obama.
He is confirmed Muslim.
Posted by: Daisy | Jun 18, 2008 9:36:30 PM
I'm one of those dirty guys that makes over 250k per year. I provide over 500 jobs and succeed despite what the government agencies try to do to us. I have no desire to pay Obamas proposed tax scheme. I am lucky(over 55), I am better to liquidate because there is no reason that I should continue the stress, wear and tear I experience so that I can pay well over half of what I make in taxes.
Posted by: Well Off | Jun 18, 2008 9:37:12 PM
Aren't Obama's proposals nothing more than extended welfare payments to those who don't want to work! How do they benefit the working class?
Posted by: Jeffrey | Jun 18, 2008 9:40:08 PM
ABC "News" is a bunch of Republican shills, just like their cousins at Faux News.
Disregard this crap. It has no place on a "news" website.
Posted by: Willie Horton | Jun 18, 2008 9:42:35 PM
I'm a democrat (and no I'm not a fan of Hillary Clinton). From what I have seen so far I agree more with McCain's policies. I would like to see some town hall meetings between the two and have some confusion why Obama won't participate. I will say that some of the comments made by Michelle Obama have scared me away.
Posted by: GregT | Jun 18, 2008 9:43:32 PM
There are a bunch of racist, stupid people in this thread.
Enjoy the next 8 years of Democratic rule, losers!
Posted by: Willie Horton | Jun 18, 2008 9:45:34 PM
Barack Hussein Obama was named after his Kenyan Muslim father, but he himself was born American, in an American state (Hawaii), and raised by his American Christian mother and her American Christian parents. His father left his life when he was two. He has never been a Muslim.
Posted by: Ann | Jun 18, 2008 9:49:11 PM
I think a god American should be gald to invest in our security and our ecomony. I would gladly pay a higher tax if the tax dollars were going toward programs for the elderly, the mentally ill and low-income families who want to be trained for a job that would transition them from welfare-to-work. Let's remember that welfare was thought up by republicans as a way to control their economic standard. Obama will make it possible for the lower income families to ear a decent living, which will boost the economy and help establish stability in the long run. Vote OBAMA for president of the USA in November 2008.
Posted by: Lou | Jun 18, 2008 9:53:33 PM
Typo corrected:
I think a good American should be glad to invest in our security and our economy. I would gladly pay a higher tax if the tax dollars were going toward programs for the elderly, the mentally ill and low-income families who want to be trained for a job that would transition them from welfare-to-work. Let's remember that welfare was thought up by republicans as a way to control ordinary people's economic standard. Obama will make it possible for the lower income families to ear a decent living, which will boost the economy and help establish stability in the long run. Vote OBAMA for president of the USA in November 2008.
Posted by: Lou | Jun 18, 2008 9:55:36 PM
We need to raise SS revenue, lower benefits, raise the qualification age or some combination of the three. The idea of a hole makes no sense. Instead, lower the ss tax rate but remove the cap. Make the break even in the mid $100k and have an overall revenue increase (tax increase). The benefit of doing it this way is that American workers will become more affordable and smaller businesses will become more affordable.
Posted by: remarks | Jun 18, 2008 10:03:15 PM
To Ann:
Am I not a good american for providing jobs and paying taxes? The government doesn't produce anything, they only collect taxes. The government will collect far less taxes by raising them on the folks that provide the jobs. Welthy folks don't mind paying their fair share which is currently around 35% of their income. Isn't that enough taking into account the wear, tear and stress most job providers have? When you raise the taxes on this group they will simply come up with ways to pay less. They didn't become successful by being stupid. Go ahead, try to tax the beejebers out of the folks that provide the jobs, see what happens. There certainly will be some change.
Posted by: Well Off | Jun 18, 2008 10:04:31 PM
Rose - I agree with you that we have to have people paying to get it out. I don't know why the federal government just requires companies makes xxx amount of profits to fully carry their own people. Instead the companies work them parttime without insurance. If they would be require to share the wealth instead they want others to partially fund their own workers while they keep all the money. That is why we are in this mess. You can not take it all, move everyone else to proverty and think a democracy will work. We as a Nation are no different than an individual. It is not rocket science. TOTAL INCOME - EXPERIENCES = MONEY LEFT FOR EVERYTHING ELSE. Not hard. No money in, no money out. We have borrowed too long from our own future income or the hope or promises of, unfornately, given the economy it is rather the lack thereof. I know college educated people that are in the low income brackets. The new poor are the educated people. I say if a company does not pay, don't even try to buy anything. No cash no buy. If they are not willing to share, then we could just stop everything and let them try to spend their own millions to get the economy going. Low to middle income should just get off the roller coaster and watch from the sidelines. Paying it all to the top, middle or the bottom won't get us out of this mess.
Posted by: Pati | Jun 18, 2008 10:07:06 PM
Obama remains a clueless fool. Why or why would any vote for the dingdong?
Posted by: creature4444 | Jun 18, 2008 10:13:08 PM
Geez, SS goes down for those make more money so isn't this yet just another example of socialism? Why not allow people to provide for themselves or atleast limit SS to those that actually pay in (you know no claiming alcholism or drug addiction as a disability anymore.)
Posted by: creature4444 | Jun 18, 2008 10:16:13 PM
This must be the time of night when all your racist posters are finally drunk.
Posted by: jim | Jun 18, 2008 10:16:22 PM
Actually, Obama hasn't changed his stance on the issues. He has been remarkably consistent.
McCain, however, flip-flopped on the oil drilling off of America's coasts. In 2003, McCain was staunchly against it. Now, he is fully supporting it. And, it won't help the price of gas at all, since oil recovered wouldn't be in the market for about a decade.
When it comes to flip-flopping (by the way, thats a Republican-coined term), McCain is the major flip-flopper this season.
Posted by: Susan2 | Jun 18, 2008 10:16:39 PM
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