Thursday, September 04, 2008

"I'm asking you to believe" says the Barack Obama Official Website. That's great, but what exactly am I supposed to be believing? Can I actually find a statement of policies that isn't dumbed down but is detailed and fleshed out?

Today's question? The Payroll Tax. What's the Plan?

This AP report says that "[Obama] would raise payroll taxes on taxpayers with incomes above $250,000,"

Just as an FYI, the "payroll tax" is Social Security. It is the money that is taken out of your paycheck for your contribution to that mystical entity known as "Social Security". Currently, the cut off is $97,500. That means if you make more than $97,500 in any given calendar year, the SSI deductions stop once your gross income hits $97,500. (Unless you switch jobs, in which case you are treated differently, with SSI withholdings continuing beyond the cutoff, resulting in a refund after you file that year's tax return). Now, if Obama's "plan" is to raise the payroll tax on taxpayers with income above $250,000 that would mean that folks earning between $97,500 and $250,000 would still have a break and have a portion of their gross income exempt from the payroll tax [i.e. there would be an unexplained GAP], while alternatively, people earning above $250,000 would continue to contribute, even though EVERYONE'S SSI benefits are capped (i.e. Warren Buffet isn't paying more in social security so that you'll get a higher benefit paid out when you're 62). I haven't seen a plan from Obama to *increase* people's social security benefits, so exactly what will happen to all of that extra money? That seems like a blank check to continue to empty out the Social Security Coffers. Not to say that George Bush has been any better, since he's been writing the checks out of Social Security for the past 8 years but, really, "Change"? It seems to me just like more big government, looking for more ways to finance exactly who-knows-what.

So, I searched for an explanation of the Payroll Tax Gap and clarification on the mysterious $250,000 number thrown out by the AP as "fact".

On Obama's website under the tab "issues" "Taxes" is not listed. I thought, okay, I'll go to Fiscal-- that leads to a discussion of "fiscal discipline". Where can I actually find a written description of his Tax plan? How can I find out about this Payroll Tax gap?

I went to the "Economy" tab and got this:

"Obama will cut income taxes by $1,000 for working families to offset the payroll tax they pay.

Provide a Tax Cut for Working Families: Obama will restore fairness to the tax code and provide 150 million workers the tax relief they need. Obama will create a new "Making Work Pay" tax credit of up to $500 per person, or $1,000 per working family. The "Making Work Pay" tax credit will completely eliminate income taxes for 10 million Americans.

Eliminate Income Taxes for Seniors Making Less than $50,000: Barack Obama will eliminate all income taxation of seniors making less than $50,000 per year. This proposal will eliminate income taxes for 7 million seniors and provide these seniors with an average savings of $1,400 each year. Under the Obama plan, 27 million American seniors will also not need to file an income tax return."

Okay. That answers part of the question, but what if you're not middle income? What if you're above-middle income, or (gasp!) below middle income? (BTW, Instead of eliminating income taxes for seniors making $50,000 or less, why not also eliminate all income tax on social security? Isn't it enough that the government deducts FICA from your pay throughout your adult life only to give it back to you at 62, 65 or 70, let alone wanting to take tax out of it then??)

Also, as an FYI, the AP report says that: "McCain's plan, which cuts taxes across all income levels, would raise after tax-income for middle-income taxpayers by 3 percent, the [Tax Policy] center concluded." (Apparently, Obama's plan cuts taxes for middle income earners by 5%, because god forbid we should share a tax cut across all income levels!)

But, back to the Payroll Tax search... Barack Obama's Economic Agenda (as found on his website) only reiterates the "Make Work Pay" $1000 tax credit against the payroll tax for certain middle-income Americans.

Obama's Plan for Fiscal Discipline a search of the pdf from the website revealed no mention of "payroll tax".

Ah, finally: Page 11 of the "Blueprint for Change" states:

"Obama believes that the first place to look for ways to strengthen Social Security is the payroll tax system. Currently, the Social Security payroll tax applies to only the first $97,500 a worker makes. Obama supports increasing the maximum amount of earnings covered by Social Security and he will work with Congress and the American people to choose a payroll tax reform package that will keep Social Security solvent for at least the next half century."

Great. Now we're getting somewhere. Let's break this down, sentence by sentence.

First: "Obama believes that the first place to look for ways to strengthen Social Security is the payroll tax system". Well, that seems to be a fancy way of saying not much at all since the payroll tax system is exactly the mechanism for collecting the funds which make up Social Security.

The next sentence, regarding the $97,500 is factually accurate.

Finally, the third sentence: "Obama supports increasing the maximum amount of earnings covered by Social Security and he will work with Congress and the American people to choose a payroll tax reform package that will keep Social Security Solvent for at least the next half century." Terrific! But what does it mean to support increasing the maximum amount of earnings covered? Can you give us some idea of just what it is you might support there? Can we have a ballpark? Is it raising the cut off from $97,500 to $300,000? Will there be no cut off? Can you throw us a bone? Should I pick a number and you can tell me (or text message me) whether I'm hot or cold? Oh, and by the way, thanks for saying you'd work with Congress. If my Constitutional Law courses serve me correctly, I think, as President, you're obligated to do that. One more thing-- when you say you're going to "work with the American people to choose a payroll tax reform package" will we be doing conference calls on that, or should I clear my schedule for a lunch meeting?

Now, for all of you crazy Manchurian-Candidate brainwashed Uber-democrats out there, hold the nasty comments and blog-votes. The Republican convention this week has certainly looked like a bunch of zombies got together in (of all places, St. Paul! Not even Minneapolis!) I'm not jumping on the McCain/Palin bandwagon and waving their flag like it's the second coming, but really, the zealotry with which many Obama supporters seem to lap up the "Change" message without really going behind it to ask detailed questions amazes me. And. CNN? I guess somebody at CNN felt that they needed to be the counterpoint to Fox. When was the last time any American media news outlet was actually *not* biased? I've taken to watching the BBC. At least they call the rhetoric as they see it.

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