Barack Obama likes the idea of getting rid of the cap on the Social Security payroll tax, which is 97,000 this year.
This is a horrible idea, both politically and economically. First, upper-middle class earners, like the rest of the USA, have been suffering through the Bushonomics just like the rest of the country, though obviously not to the same extent. They are also a big source of votes.
The very rich are too small in number to matter much on election day, but those making $100,000 to $200,000 per year are a huge swing-demographic. CNN's 2006 exit poll showed 13% of voters claim an income of 100K to 150K, and another 5% make 150 to 200K. These groups have been rapidly trending Democrat since Bush has been in office, and split their vote almost evenly 47D/51R in the 2006 congressional elections.
Gains in upper middle class voters in 2004 and 2006 resulted in some of our most impressive victories those years in high-income areas like Northern Virginia, Connecticut, Colorado, South Florida, and New Hamphire.
Obama's idea specifically is (quoting from an op-ed he wrote):
If we kept the payroll tax rate exactly the same but applied it to all earnings and not just the first $97,000 we could eliminate the entire Social Security shortfall.
Let me first point out Obama (and Bush, and David Broder, and the CATO Institute) are wrong, and there is no need for us to fix any Social Security "shortfall."
Next, let's look at how big a tax hike Obama's idea would have meant for people at the following salary levels:
$120,000 a year: tax hike of $2852
$140,000 a year: tax hike of $5332
$160,000 a year: tax hike of $7812
$180,000 a year: tax hike of $10,292
$200,000 a year: tax hike of $12,272
And the most perverse part of Obama's tax hike idea is that it ONLY applies to payroll income. The truly rich are the only group that made out well under Bush, but they'd get off scott free because they make their money from dividends and capital gains, not labor income.
So the thousands of cops, corrections workers, and firefighters in Nevada who who made more than $100,000 last yearputting in massive amounts of overtime would get hit with thousands more in taxes, but the rentier who makes all his money sitting on his butt "daytrading" stocks and cashing his dividend checks wouldn't pay an extra red cent under Obama's tax hike.
Talk about class warfare!
There aren't too many people making millions a year where I grew up, or in most of the USA. But there are family doctors everywhere, and they made an average of $149,850 in 2006 according to the Bureau of Labor Statistics. Obama suggests fixing the nonexistent Social Security "shortfall" on their backs by increasing the amount of Social Security tax they pay each year from about $12,000 to about $18,500. Given that doctors are the most respected profession in the country, and they live everywhere in the USA, I wonder how many votes Democrats will lose just from them and the people who trust them becuase of Obama's Social Security tax hike idea if he's the nominee.
You can damn well be sure that the GOP will attack Obama on this if he's the nominee. And they'd be right, it is a horrible idea. And what is his defense? He proposed it himself, in writing, in a newspaper!