Politics: To save Social Security, Obama backing higher taxes for upper income levels
From Barack Obama’s appearance Sunday on Meet the Press (transcript):
“I think the best way to approach this is to adjust the cap on the payroll tax so that people like myself are paying a little bit more and people who are in need are protected,†the Illinois senator said.
“That is the option that I will be pushing forward.â€
Currently, only the first $97,500 of a person’s annual income is taxed. The amount is scheduled to rise to $102,000 next year.
Obama’s proposal could include a gap or “doughnut hole†to shield middle-income earners from paying more in taxes, he said.
Obama has tried to draw contrasts between himself and front-runner Hillary Rodham Clinton on Social Security, saying on the stump and in TV ads that she has dodged tough questions about its finances.
Obama said some tough decisions will be in order because Social Security is the most important social program in the country.
“It’s not sufficient for us to just finesse the issue because we’re worried that, well, we might be attacked for the various options we present,†he said.
Clinton has said growing the economy will pump more money into Social Security’s coffers. She also has said she would create a bipartisan commission to recommend solutions.
Social Security is projected to start spending more than it collects beginning in 2017, with its trust fund depleted in 2041.
Obama also invoked his friend, billionaire Warren Buffett, who Obama said has expressed concern that he pays less in Social Security taxes than anyone else in his office.
“And he has said, and I think a lot of us who have been fortunate are willing to pay a little bit more to make sure that a senior citizen who is struggling to deal with rising property taxes or rising heating bills, that they’ve got the coverage that they need,†Obama said.
Michelle Malkin is commenting that the “nutroots” are going nuclear on Obama for daring to suggest that Social Security might be in danger. Malkin, like many conservatives, likes to define the Democrats by it’s most rabid left-wing members. This is no different than liberals who assume that Rush Limbaugh speaks for the entire Republican Party (in all fairness, it’s an assumption that Limbaugh makes for himself).
The rest of us in the middle just want someone to do something to keep this the government’s mandatory, no-opt-out retirement program solvent. I’d love for the system to start letting people devote a portion of what what pay toward real investments in stocks or bonds. Too bad I’m not hearing Obama suggest something like that.
 Updated: Headline corrected
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I believe means testing refers to an income level that determines who receives the “benefit” in question. For example, a means test would mean if you make over $XXX , you don’t get any Social Security. What Obama has proposed is to raise the cap on income that is now subject to the Social Security tax. Individuals earning over the cap would still be eligible for Social Security, but would be paying more Social Security taxes on their income.
You are right. Correction soon.
The candidate who dodges the questions is more likely to win. Hillary’s grow-the-economy-blue-ribbon-panel drivel is just crossing your fingers and hoping for the best.
Americans hate “tough decisions.” I guess Obama hasn’t figured that out yet.
“I’d love for the system to start letting people devote a portion of what that pay toward real investments in stocks or bonds. ”
Next time you go through the drive thru lane at some fast food restaurant, take a good look at the staff and ask yourself; ” Would I want that person managing my retirement fund? ” Pick some random person… would you want them to? Seriously most people haven’t a farkin clue how to manage investments like stocks n bonds. I read some article which claimed that in 20 some years were are going to see a crisis in 401ks. People don’t know how to care for them. Indeed with all that money put in and they will be WORSE off and that is if they are even putting money in an available 401k. Seriously. There are already changes afoot for 401ks to help investors but the program is still essentially an investor managed account. Why talk about 401ks… well I think some people have wild visions of turning social security into some sort of grand 401k like scheme.
Social Security is far from perfect but it does what it set out to do which is to provide a minimum of support for those most in need in retirement.
There is nothing stopping you from socking away some cash now, in an IRA… pre-tax.
What Obama is proposing makes sense. Why have an upper income limit of paying into social security? It makes the tax worse than regressive. Warren Buffet pays his social security tax in the first week of the year, if not the first hour, and never pays into it again the rest of the year. The 7.65% rate should be flat through all income levels. I am ‘ok’ with this.
Mahkno: There are thousands of government run pension plans that have no trouble whatsoever making decisions on what stocks and bonds to invest their employees’ future in. To suggest that it’s too risky for the federal government to do the exact same thing with the money people pay into the Social Security system is silly. Even taking into account the various crashes through the decades, had today’s Social Security recipients been instead allowed to invest in the sort of conservative stocks and bonds most pensions plans pick, the SS system would be solvent.
is via the Libertarian Party, so those inclined to do so can dismiss it on that basis. But even if half the benefits to privatization are realized, it’s astonishing:
Yeah, our current system is SOOOOOOO much better.