55 PERCENT TAX RATE UNDER OBAMAMONICS?
January 8, 2008
Barack Obama recently alluded to his big tax plans -- including eliminating the cap on Social Security/Medicare payroll taxes. This means that he'd abandon all pretenses that Social Security and Medicare are pension programs -- since the elimination of the cap (taxing all income, with no limit) would remove any connection between the level of contributions a citizen makes and the benefits he takes, says Michael Medved, a nationally syndicated talk radio host.
In practical terms, the impact would be huge, says Medved:
- Today, the top marginal tax rate is 35 percent, and income above $102,000 a year isn't subject to the payroll tax.
- That means that the money you're lucky enough to earn above $102,000 gets taxed at a rate of 35 cents on the dollar, at most.
- Under Obamamonics, on the other hand, we would go back to the old Clinton era top marginal rate of 39.6 percent, plus making income above the cap fully subject to the payroll tax -- usually a combined 15 percent, but almost sure to go up.
- In other words, we'd be looking at paying as much as 55 cents on the dollar for income earned above $102,000.
If anyone still thinks this election doesn't matter, just consider a normal, middle class family (with two incomes) that will earn $200,000 and still struggle to pay a mortgage, and college expenses, and so forth, in many Metropolitan areas, says Medved. Under a new Democratic President, that family could be looking at additional tax burdens that confiscate the majority of their additional income.
Source: Michael Medved, "55% Tax Rate under Obamamonics?" Townhall.com, January 8, 2008.
Browse more articles on Tax and Spending Issues