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Author: CycleGirl One star, 50 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 19483  
Subject: Re: Obama on payroll tax Date: 6/16/2008 8:21 PM
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I feel like I'm getting in on this discussion kind of late. Oh well...

First off, I want to disagree with Obama's statement "it is unfair for middle-class earners to pay Social Security tax 'on every dime they make," while millionaires and billionaires pay it only on 'a very small percentage of their income.'"

Under the current system benefits are proportional to wages up to a cap. In the same way, the withholding is proportional wages up to a cap. Therefore, the current system seems fair to me. Possibly the fairest of any government program I can think of.

What Obama proposes is to have the wealthy subsidize the social security system. This would redistribute wealth from the rich to the poor. Setting aside whether or not that's a good idea, in my perfect world, I only wish people would just call something what it is.

Having said that, I do actually think that having higher income earners pay more into the SS system without increasing benefits might be a good way to keep the system solvent. I mean, we all know that entitlements are going to need more funding and this 6.2% flat tax looks a lot better to me that a massive increase on taxes on investments.

Personally, the "donut hole" between $102k and $250k that Obama leaves me scratching my head. Does this make sense to anyone? It seems like a flat payroll tax would be "cleaner."

CG
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