NCAAbbs

November 11, 2007
Obama: I deserve a tax increase
Sen. Barack Obama says he will push for higher Social Security taxes.
WASHINGTON (AP) — Democrat Barack Obama said Sunday he will push for higher Social Security taxes if elected, viewing it as the best option for improving the retirement program's finances.

Obama and several other Democratic presidential candidates previously have signaled support for lifting the cap on the amount of income that is taxed to provide monthly Social Security checks.

But during an interview on NBC's "Meet the Press," Obama said taxing more of a person's income was the option he would push for if elected president. He objected to benefit cuts or a higher retirement age.

"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." Currently, only the first $97,500 of a person's annual income is taxed. That cap 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 higher payroll 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.

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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 is paying 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.

On the Republican side, candidate Fred Thompson last week unveiled a Social Security proposal that calls for reducing benefits to future retirees and creating a system of voluntary personal retirement accounts. The plan is similar to one put forth by President Bush that ultimately stalled in Congress.

How about this, Hussein Obama, completely eliminate my SS benefits. Personally, I don't need them, as long as you don't tax my income. I can manage MY money better than YOU!

If I did not have this money TAKEN from me every pay check, and I invested this money on my own, I would have 1-2 Million more when I retire instead of 3-k yearly from SS. What a joke the gov't is.

Yeah, why doesn't the government let people plan their own retirement instead of making us pay into a financially non-solvent black hole.

mobileblazer Wrote:How about this, Hussein Obama, completely eliminate my SS benefits. Personally, I don't need them, as long as you don't tax my income. I can manage MY money better than YOU!

If I did not have this money TAKEN from me every pay check, and I invested this money on my own, I would have 1-2 Million more when I retire instead of 3-k yearly from SS. What a joke the gov't is.

Your response points up a fault in Social Security that goes back to its origins. It should have been passed as a direct income tax like the IRS collects. Ownership would not be the problem it has become if like other taxes, it simply went into a federal fund and was paid out as needed by those who had the least to retire on.
When SS was first proposed, the average life expectancy in retirement was two (2) years. Only a very few lived past 70. Remember that the medical revolution begun by the discovery of penicillin, the FIRST "wonder drug", was only a few years old at that time. The collection of the FICA tax now ends at the relatively low wage of $90,000, which for the top 40% of households is reached before summer starts.(The Forbes Top 500 income folks reach it before Jan. 10th each year)
Like with gasoline prices, the US consumers are used to lower taxes than most industrialized nations. We choke at $3 per gallon while many elsewhere are paying $5 and up. In terms of total annual household taxes paid, the average US family doesn't even make the Top 20 in the Developed World. Last I saw (1990s) we ranked about #32 in the world. What throws us a lot is that we tax the poor and middle income more heavily than the "rich" and most wealthy. Many of us would have more in our pockets if, like the wealthiest, we paid 10%-18% of our total income than the 20%-30% paid by the bottom 50% of households. (Check US Census income figures from the 2000 census and see)

Last I checked... the poorest don't pay income taxes in the US, they get refunds from taxes not paid. I have done hundreds of tax returns and I have seen many people get fat refund checks where they never paid a penny in income taxes for the entire year.

I am all for the fair tax. It would be the fairest way and would make it where the poorest do get a credit for their expenditures for basic needs. Other countries where I have lived have between 15-28% sales taxes on top of income taxes.

BTR Wrote:Last I checked... the poorest don't pay income taxes in the US, they get refunds from taxes not paid. I have done hundreds of tax returns and I have seen many people get fat refund checks where they never paid a penny in income taxes for the entire year.

I am all for the fair tax. It would be the fairest way and would make it where the poorest do get a credit for their expenditures for basic needs. Other countries where I have lived have between 15-28% sales taxes on top of income taxes.

I refered to the poorest 50% of households, not the poorest individuals. Since the median income is about $40,000 per year, the 50% of households is in that financial neighborhood. These pay between 20% and 30% of their income in IRS with-held taxes while the top average about <15% to 18% of all income. That gives most the feeling of being heavily taxed which they are compared to the Buffetts (W.B. stated that he paid <18% in taxes) and such of the nation. As long as the tax laws are written by and for those who make the most, we will continue to have this disparity so harsh to the lowest 50% of households.

I fall in that median income level and don't pay anywhere near that amount in federal income taxes. I actually should get back every penny I paid in federal taxes this year PLUS about $3000 in child credits/EIC. I am right in that median income level and will make $3000 on my federal taxes this year. I do have four kids and that will play into it but even without the kids I I do pay over 15% in FICA though because I am considered self-employed.

I was at a retail store yesterday and the employee was complaining about all the taxes he paid. He said that something called FICA was always getting most of his taxes. I assume that he made so little that his fed and state income taxes were negligible but the FICA is always going to get him. I asked him if he new what FICA was for and he said no. I explained it and his response was why am I worrying about that now? I am in my twenties!

So even though I am one of the people that the fair tax would adversely affect tax-wise, I am for it because I believe it is a more equitable option. You spend money, you pay taxes. You don't spend money, you don't pay taxes. There would be no deductions, no forms, no filing, nothing but paying your taxes when you consume. The richer people would obviously pay more in taxes assuming that they continue buying more stuff.

dfarr Wrote:Yeah, why doesn't the government let people plan their own retirement instead of making us pay into a financially non-solvent black hole.

Yeah, I think that's what investors were saying right up until Oct. 1929 also.

MC Blazer Wrote:

dfarr Wrote:Yeah, why doesn't the government let people plan their own retirement instead of making us pay into a financially non-solvent black hole.

Yeah, I think that's what investors were saying right up until Oct. 1929 also.

Since when does the government exist to save people from themselves? Besides, government intervention did more to exacerbate that crash and the depression that followed than if they had just left things alone.

MC Blazer Wrote:

dfarr Wrote:Yeah, why doesn't the government let people plan their own retirement instead of making us pay into a financially non-solvent black hole.

Yeah, I think that's what investors were saying right up until Oct. 1929 also.

Investing and saving are two different things. You invest to make money, you save to live for when you retire.

Yeah, I think that's what investors were saying right up until Oct. 1929 also.
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Since when does the government exist to save people from themselves? Besides, government intervention did more to exacerbate that crash and the depression that followed than if they had just left things alone.
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The gov't does NOT do anything just to be nice. The gov't "protects" people when a member of Congress sees an opportunity to head off a greater problem by dealing with a smaller one. An example was when a major national company welched on its pension responsibilities recently throwing their retirees onto the public "safety net" program which paid them pennies on the dollar compared to the pension they had been promised. By keeping these people from being solely dependent on support by Social Security, the gov't headed off a public demand for greater federal legal protection requirements for private pension plans.