Obama Calls For Higher Taxes On Wealthiest 3 Percent

COLUMBUS, Ohio (AP) -- Democratic Sen. Barack Obama on Friday called for higher payroll taxes on wage-earners making more than $250,000 annually, a step that would affect the wealthiest 3 percent of Americans.

The presidential candidate told senior citizens in Ohio that it is unfair for middle-class earners to pay the Social Security tax "on every dime they make," while millionaires and billionaires pay it on only "a very small percentage of their income."

The 6.2 percent payroll tax is now applied to all wages up to $102,000 a year, which covers the entire amount for most Americans. Under Obama's plan, the tax would not apply to wages between that amount and $250,000. But all annual salaries above the quarter-million-dollar amount would be taxed under his plan, Obama said.

Obama also said his rival, John McCain, has indicated in the past he was willing to consider higher payroll taxes.

But Douglas Holz-Eakin, the Republican candidate's senior economic policy adviser, said that as president, McCain would not consider an increase "under any imagineable circumstance."

Obama was vague about what forms of income would be affected, saying, "We should exempt anyone making under $250,000 from this increase so that the change doesn't burden middle-class Americans." Campaign aides said the additional tax, like the current one, would apply only to wages and salaries and not to other forms of income such as investments.

Obama has talked before of establishing such a "doughnut hole" in the amount of income subject to the Social Security tax. Friday marked the first time he confirmed a resumption point: $250,000 and above.

Obama made the remarks at a retirement facility in Columbus, capital of a state he lost badly to Sen. Hillary Rodham Clinton in the Democratic primary on March 4. Republican John McCain is hoping to carry Ohio this fall, as President Bush did four years ago in his narrow win over Democrat John Kerry.

Obama said his plan "allows us to extend the life of Social Security" without raising the retirement age or cutting benefits. He said McCain "a few years ago" stated that he might consider a higher cap on incomes subject to the tax, "but today he's attacking me for holding the very same position."

Obama also criticized McCain for being open to letting taxpayers invest part of their Social Security payments in private investment accounts.

"Imagine if your security now was tied up with the Dow Jones," he said, alluding to the recent slide in stock prices. "You wouldn't feel very confident about the security of your nest egg."

McCain, campaigning Friday in New Jersey, said Obama was misrepresenting his position.

"I will not privatize Social Security," he said. "But I would like for younger workers, younger workers only, to have an opportunity to take a few of their tax dollars, a few of theirs, and maybe put it into an account with their name on it. That's their money."

He told reporters later on his campaign bus: "Private savings accounts have to be voluntary, they have to be only for young people, and they can't be the centerpiece of the argument. We have to solve this problem and not worry about private savings accounts, because even though I support them, I don't think it's central to the issue. Central to the issue is that the system is going broke. Of course I'm not for privatization. But I do think young workers ought to have some options."

Current retirees would not lose any benefits, McCain said.

The total Social Security tax rate of 12.4 percent is evenly divided between workers and their employers.

Obama, speaking on other retirement issues, said he would "limit circumstances when retirement benefits can be cut," and increase the wages and benefits workers could protect in bankruptcy court. Companies would have to disclose more about their pension fund investments, he said. He vowed to end "the outrage of executives getting bonuses while workers watch pensions disappear."

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  • by Rusty Location: Washington on Jun 20, 2008 at 01:46 PM
    When you look at what he wants to do and most act like he knows what he is doing, you wonder why anyone would vote for him. A good example, he wants to go after the oil companies for windfall profits. It is the speculators making the money and taking the risk. If he does this like Jimmy Carter did in the 70s, we will have gas lines. The only guy I am going to vote for is the one that allows us to drill for oil in the USA. Gas prices affecting everything in this country. If some would open their eyes they would know the direction he is taking us, raise taxes to all. I have never of a heard lib raise taxes on just the upper incomes, it always trickles down. They want solar and wind at a time we need oil and nuclear. Typical of the party line. The party that took religion out of school, wants gay "marriage", out of a war we are winning and doing good for the people there.....he is a change you can believe in....that is what you will have left when you get your paycheck and buy gas
  • by voter Location: nc on Jun 15, 2008 at 04:43 PM
    no cactus, you won't go on welfare, nor will most taxpayers. it has to do with pride, dignity, and honor. which is the way it's supposed to be. outstanding comments on this issue. right on the mark.
  • by Devil Dog Location: New Bern on Jun 15, 2008 at 12:09 PM
    I was around and suffered during the Carter administration. I guess the younger generation needs to do a little suffering to appreciate what they have.. If so, OBAMA is the man. CHANGE is like a dirty diaper...same old crap just a different face.
  • by Mike Location: Edenton on Jun 15, 2008 at 03:34 AM
    According to the polls many of those who make over $250K are voting for him. I wonder if this will change their minds. But don't think for a minute that the tax increase will not "trickle down" into the middle class. He also wants another "Viet Nam" by pulling out of Iraq. I won't go to the similarities in this forum. But just look that we still have troops in Japan and Korea for how long????? Wake UP!!!
  • by Cactus Location: Strabane,NC on Jun 14, 2008 at 08:21 PM
    OK, you go thru 4 years of college, work your butt off to become a success and inprove your earnings and Obama will tax you for your hard work and success. I think I'll just draw welfare and food stamps.
  • by Devil Dog Location: New Bern on Jun 14, 2008 at 11:13 AM
    COMRAD Obama is a BS artist. CONGRESS needs to have their mouths duct taped, and no more TV cameras, until they pass BI-PARTISON legislation on energy, medicare, and other critical programs. I bet if we charge OPEC $136 for a buschel of corn, rice and wheat the $136 per barrel of oil would drop real quick. If we keep re-electing the same people to Congress, and expect different results, we are the idiots. I've been around the world 3 times, and went to 2 "goat ropins" and never seen anything like this idiot. I guess he will blame BUSH on the disasters in the midwest when food prices go up. At least their are no robberies and shootings going on like Katrina.
  • by alex Location: Vanceboro on Jun 14, 2008 at 08:31 AM
    so he will tax achievement. maybe he will take the thugs off the street who are draining our system & deport the illegals
  • by Ted Location: Greenville on Jun 14, 2008 at 08:31 AM
    I hope this idiot wins. The country will be screwed up for the next four years no matter which of these two liberals are elected. Might as well allow the democrats to have all the blame.

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