“Currently, The Social Security Payroll Tax Applies To Only The First $102,000 A Worker Makes. Obama Supports Increasing The Maximum Amount Of Earnings Covered By Social Security”
That’s from Obama’s website, and it is one of the key issues in the campaign ahead. Obama’s vast array of proposed tax hikes –6.2% on every dollar above 102K in income, doubling the capital gains tax, bringing back the highest rate on death taxes etc– would be a shock to the economic health of the country far more devastating than the run-up in gas prices because there are no ways to avoid or minimizze taxes. The Obama plan would take a period of economic weaknesses and turn it into a recession or even a near depression.
21.8% of American families make over $100,000 per household, and 11 million Americans made more than $100,000 in 2005, with another 4 million in the income categories just below that level. Tens of millions of Americans strive to reach the six figure level, and if the cannot they hope their children will. Obama is planning to congratulate them on their achievment by adding an enormous burden to their entire careers: $6.20 out of every additional hundred they make off the top, then it is on the federal, state and local taxes on the rest.
The rate of social security has steadily climbed over the years, but its drag on productivity has been curbed by the cap on the amount of income it has been levied upon. The cap has been a sort of beacon to the middle and upper-middle class: Cross this line and the government will at least stop taking the first 6.2% of your wages.
Obama is proposing a massive tax increase on the most productive people as his “save social security” plan. The impact on the individuals and their families would be enormous, and the disincentive to earn more than 100K and to shift economic benefits into other than salary would be enormous.
This is a radical proposal, consistent with the rest of Obama’s sweeping vision for the Euroization of the American economy.