• If you are having problems logging in please use the Contact Us in the lower right hand corner of the forum page for assistance.

nobomas social security plan

hopalong

Well-known member
28, 4:27 AM EDT


Details missing from Obama's Social Security plan

By CHARLES BABINGTON
Associated Press Writer


AP Photo/Nam Y. Huh







Interactive
Social Security

Latest News
Details missing from Obama's Social Security plan
Social Security unveils new earnings calculator

McCain gets Social Security but criticizes system


Latest News


WASHINGTON (AP) -- Barack Obama's bid to place a new Social Security tax on very high incomes is either a bold or foolhardy plan, depending on who critiques it.

But its potential impact is almost impossible to gauge because he is providing few details on basic questions such as what the tax rate might be, what types of income would be taxed and how the taxpayers' benefits would be affected.

The Democratic presidential candidate says he would work with lawmakers from both parties to resolve such matters. Voters generally applaud bipartisan cooperation, but they apparently will go to the polls this fall with only a vague notion of what Obama has in mind.

Obama made headlines June 13 when he called for a Social Security payroll tax on incomes above $250,000 a year. Currently, the tax is levied only on the first $102,000 of each worker's income. That covers the entire salary of most Americans.

Obama would not apply the Social Security tax to annual incomes between $102,000 and $250,000, a move meant to avoid alienating several million upper-income voters. His proposed change would apply only to those earning more than $250,000 a year, or about 3 percent of all taxpayers.

When he outlined his idea in the battleground state of Ohio, Obama said it is unfair for middle-class earners to pay the Social Security tax "on every dime they make," while millionaires and billionaires pay it on "only a very small percentage of their income." He also said the Social Security program needs revamping to bolster its long-term viability.

With Obama offering few details, several news accounts suggested that his proposed tax on very high incomes would be applied just as the existing Social Security tax is levied on incomes up to $102,000.

All workers pay a 6.2 percent Social Security payroll tax on such income. Their employers match it, for a total tax of 12.4 percent. The tax applies only to earned income, not to passive income such as dividends and interest.

In recent weeks, Obama aides have quietly indicated that the proposed tax on incomes above $250,000 might be different in key aspects. The rate probably would be about 2 percent to 4 percent, not 6.2 percent, they said. It's also possible that it would apply to more types of income, including dividends and investments.

As for benefits, the campaign has not said how the proposed tax on very high incomes would translate into new retirement income, if any, for those who pay it.

The campaign "has not put forth a specific plan" for Social Security, Obama economic adviser Austan Goolsbee said in an interview.

Perhaps because so many details are missing, Obama's Social Security proposal has generated relatively little debate on the campaign trail. But any change to the massive program could have far-reaching effects.

Many Americans rely on Social Security for much or all of their retirement income. Some workers, meanwhile, do not realize how much is withheld from each paycheck for Social Security and, to a lesser degree, Medicare.

Nearly three-fourths of all workers pay more in these payroll taxes than in federal income taxes, according to the Center on Budget and Policy Priorities. The center assumes that workers pay the full 12.4 percent in Social Security taxes, contending that employers would devote their half of the total to salaries if they did not have to make the 50-50 match.

Given the dearth of details about Obama's plans, some Republicans have criticized it, using assumptions that Democrats reject. Lawrence B. Lindsey, a former economic adviser to President Bush, argues that high earners would pay the full 12.4 percent tax rate on income above $250,000 while receiving no added benefits.

"A high-income entrepreneur would see his or her federal marginal tax rate rise to 53 percent from 37.7 percent," Lindsey wrote in a June 20 Wall Street Journal op-ed column.

The marginal tax rate is what a person pays on each additional dollar earned. Lindsey wrote that Obama's plans would provide a powerful incentive for the highest-earning Americans to work less, invest less and contribute less to the economy.

Former Oklahoma Sen. Don Nickles, a Republican, agreed. A person who owns two restaurants and makes $500,000 a year would have little incentive to open a third restaurant under Obama's tax plans, and might even close one, Nickles said in an interview. "He's not going to be hiring more people," Nickles said.

Obama economic adviser Jason Furman, responding to Lindsey in a letter published by The Wall Street Journal, said Obama would "work with Congress on a bipartisan basis to design the details" of his Social Security plan, "including the tax rate, how it is phased in over time, the linkage between these tax payments and benefits, and other critical design elements of this plan."

Furman wrote that Obama "has not proposed a 12.4-percentage point tax increase on earnings above $250,000."
 

fff

Well-known member
As opposed to John McCain who called system for funding Social Security is "a disgrace", and was against private Social Security accounts before he was for private accounts. I would definitely encourage John McCain to talk about Social Security. :D

The system for funding Social Security is "a disgrace" because it forces young workers to pay into a program that is unlikely to benefit them in its current form, Republican presidential candidate John McCain said this week, wading into politically touchy territory.

Like many other politicians, McCain often questions the long-term viability of the government retirement program. But he raised eyebrows with an unusually harsh assessment Monday at a town-hall forum in Denver.

Asked by a young woman if she is likely to receive Social Security benefits someday, McCain said it was unlikely "unless we fix it."

"Americans have got to understand that we are paying present-day retirees with the taxes paid by young workers in America today," he said. "And that's a disgrace. It's an absolute disgrace, and it's got to be fixed."

Some Democrats criticized the remarks because McCain basically was describing how Social Security has always worked. Current retiree benefits are supplied by payroll taxes from current workers.

In a conference call organized by the Democratic Party, Gerald McEntee, president of the American Federation of State, County and Municipal Employees, said Social Security has "always been pay as you go, with today's workers paying for today's retirees. What's a disgrace is that this is news to John McCain."

Because Social Security now runs a surplus, the extra money is used to pay for other government programs. But benefits will begin to outstrip Social Security tax revenues in about nine years, the program's trustees said in March. They reported that its trust fund will be depleted by 2041 unless the formula is changed.

In Denver, McCain offered no specific remedies, but said he would sit down with Democrats and Republicans to find them. "I want to be president to do the hard things," he said.

Speaking to reporters on his campaign bus Wednesday in Ohio, McCain went into greater detail. Young workers, he said, "are paying into a system that they won't receive benefits from on the present track that it's on. That's the point. I don't think it's fair. I think it's terrible."

"That's why we have to fix it," McCain said, pointing to a 1983 bipartisan agreement that bolstered Social Security for a while by cutting benefits and raising taxes.

McCain declined to say whether he would endorse a similar package, or a higher retirement age or other suggestions that have been made.

"I cannot tell you what I would do," he said, "except to put everything on the table. Because as soon as I say 'This is what would be my requirement,' then you get into a huge fight and you get all the special interests involved. I would put everything on the table."

In 2005, President Bush proposed a partial privatization of Social Security in which some of a worker's payroll taxes would go into an investment account that would follow the worker into retirement. It proved unpopular with the public and Congress, then controlled by Republicans, set it aside.

McCain's Democratic rival, Barack Obama, has suggested a tax on high-earning workers to boost Social Security's long-term health. Currently, wages up to $102,000 a year are subject to a 12 percent payroll tax, which is evenly split between workers and their employers.

Obama has suggested a new Social Security tax on all income above $250,000. He said he would work with Democrats and Republicans in Congress to work out the details of a plan to revamp the program.

http://www.boston.com/news/nation/articles/2008/07/09/mccain_social_security_funding_now_a_disgrace/
 

fff

Well-known member
You may be right. It's hard to keep up with the spin. Apparently he supported Bush's plan, then said he didn't, now he is again, but saying he never did. :D We can call this "gotcha" politics or, if you are drawing or expect to draw Social Security, it might be more than a gotcha moment. :D

Despite Claim, John McCain Wants to Privatize Social Security
After years of standing with President Bush to promote Social Security privatization, John McCain tried to convince voters yesterday that he was "not for privatizing Social Security. I never have been. I never will be." However, a closer look at the facts show Senator McCain clearly does and has long supported privatizing Social Security.

In 2004, Senator McCain said "without privatization, I don't see how you can possibly, over time, make sure that young Americans are able to receive Social Security benefits." In 2005 Senator McCain hit the road with President Bush to help promote the President's failed effort to promote private accounts.

In fact, as recently as March 2008, McCain told the Wall Street Journal he still supports President Bush's plan and is "totally in favor of personal savings accounts."

See Senator McCain's Social Security distortion here:

video at the link claiming he's not for privatizing Social Security, never was, never will be.

"The facts are the facts. Senator McCain supports privatizing Social Security, and was a voice for the Bush propaganda machine that tried to sell it to the American people," said Kansas Democratic Party Executive Director Mike Gaughan. "How does John McCain expect Kansans to trust him after telling voters he opposes privatizing Social Security despite years of clearly supporting it?

“Kansas can't afford another president like George W. Bush who is willing to put the retirement security of hard working Kansas families at risk."

2004: McCain Says Privatization Only Way to Go Forward. Responding to a question of whether "privatizing Social Security be a priority for you going forward?" McCain answered, "Without privatization, I don't see how you can possibly, over time, make sure that young Americans are able to receive Social Security benefits." [C-Span Road to the White House, 11/18/2004]

2005: McCain Campaigned for Bush Social Security Plan. "McCain has been especially supportive of his onetime rival, appearing with Bush at three events over the past two days in trying to prod Democrats into negotiations to include private accounts in a plan to revamp Social Security." [Washington Post, 3/23/05]

2008: McCain "Totally In Favor" of Bush Privatization Plan. Earlier this year, McCain said "As part of Social Security reform, I believe that private savings accounts are a part of it - along the lines of what President Bush proposed." He pointed out that I campaigned in support of President Bush's proposal and I campaigned with him, and I did town hall meetings with him." [Wall Street Journal, 3/3/08]

http://ksdp.org/node/4778
 

Mike

Well-known member
He has always been for privatizing a portion of SS.

Never has been for privatizing all of it, that I know of.

Your spin isn't giving the whole picture. :roll: As usual.
 

fff

Well-known member
Mike said:
He has always been for privatizing a portion of SS.

Never has been for privatizing all of it, that I know of.

Your spin isn't giving the whole picture. :roll: As usual.

John McCain's spin isn't giving the whole picture either. Is he or is he not for privatizing Social Security? Apparently he supported Bush's unpopular plan. Now he says he's ""not for privatizing Social Security. I never have been. I never will be." Call it spin if you want, but that's a pretty blanket statment that's easily shown to be untrue.

Social Security is an important part of working American's lives. And they know which party supports Social Security. IMO, this is not a topic McCain wants to spend a lot of time on.
 

Mike

Well-known member
He is not for privatizing SS entirely. Never has been.

He is for privatizing a portion. Always has been. Simple enough. :roll:
 

fff

Well-known member
Mike said:
He is not for privatizing SS entirely. Never has been.

He is for privatizing a portion. Always has been. Simple enough. :roll:

Earlier in the thread Mike said:
Never has been for privatizing all of it, that I know of.

Now who's spinning? :lol: :lol:

(My bold)
 

Mike

Well-known member
fff said:
Mike said:
He is not for privatizing SS entirely. Never has been.

He is for privatizing a portion. Always has been. Simple enough. :roll:

Earlier in the thread Mike said:
Never has been for privatizing all of it, that I know of.

Now who's spinning? :lol: :lol:

(My bold)

No one. Privatizing "ALL" of SS is the exact same thing as "Entirely" privatizing SS.

Can't you read?
 
Top