Source: ABC News – 9/22/2007
Thoughts: Senator Obama and John Edwards definitely do not read the U.S. Common Sense web site and our recommendation on Social Security reform. Instead of working to fix the system, they think that taxing people more is a sufficient Band-Aid to cover the problem until it is addressed again in the future. And what really is surprising is that Obama, who called for middle-class tax relief just last week, wants to raise taxes on the middle class. Are you confused as well? Let me try to clarify something for our Senator. Just because you might earn $100K per year doesn’t mean you are rich, especially if you are working near a major city. Because of that, John Edwards does deserve some credit for by saying the tax should be placed on those making over $200K per year, but still it is a tax increase where one is not needed. By going back to what Social Security was intended to be the amount of money currently generated by the Social Security tax is more than enough to cover those who actually need the additional assistance.
Article: “Obama Floats Social Security Tax Hike”
By Teddy Davis
Sen. Barack Obama, D-Ill., is considering a major tax hike on the rich to shore up the nation’s Social Security system.
(Article continues.)
“If we kept the payroll tax rate exactly the same but applied it to all earnings and not just the first $97,000,” Obama wrote this week in an Iowa newspaper, “we could eliminate the entire Social Security shortfall.”
Obama’s idea, which he described on the op-ed page of Friday’s Quad City Times as being “one possible option” and not a formal plan, would raise more than $1 trillion over 10 years by subjecting income of more than $97,000 to a 12.4 percent tax. Half of the tax would be paid by employees and half would be paid by employers.
Obama is floating the idea of a tax hike on the rich as a way of assuring lower- and middle-income voters that he sees an option for ensuring Social Security’s solvency that would not burden them. Obama has been indirectly criticized by Sen. Hillary Clinton, D-N.Y., for suggesting on ABC News’ “This Week with George Stephanopoulos” that a higher retirement age should be “on the table.”
By suggesting the elimination of the Social Security tax cap, Obama has distinguished himself as the presidential candidate most willing to touch the “third rail” of American politics. No other major candidate has come close to offering a specific idea with the potential of generating as much revenue.
Obama’s idea, however, also carries considerable political risk.
(Read the rest of the article here.)
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