Thursday, April 21, 2011

Just say it, Mr. President.

Reuters reports that "Obama backs lifting income cap for Social Security," referencing proposals to increase the $106,800 earnings cap on which Social Security taxes are applied and (although rarely mentioned) Social Security benefits are calculated. At an event on Tuesday in Annandale, Virginia, the president said:

For the vast majority of Americans, every dime you earn, you're paying some in Social Security. But for (billionaire investor) Warren Buffett, he stops paying at a little bit over $100,000 and then the next $50 billion he's not paying a dime in Social Security taxes.

I very much doubt that Warren Buffet has $50 billion of any kind of income, much less that it's earned income (the kind that Social Security taxes). And, in a recent Retirement Policy Outlook, I raise a number of policy issues regarding an increase in the tax max. But it's clear that President Obama would like to increase the tax max.

What's not clear is that he actually "backed" it. I was expecting at some point a punch line like "And so, my fellow Americans, I favor increasing the tax max." (The full transcript of the discussion is available here.) Not with this president, who's very postmodern and subtle. He leaves it to the listener to infer what he wants. Sort of like watching a French movie.

But at some point I can't blame Congressional Republicans—and Democrats, too, for that matter—if they yell out, "Just say it!" Increasing the tax max would constitute a tax increase for the "middle class," defined in the president's terms as those with incomes less than $250,000. Everyone knows that if the President wants to balance the budget without significant reductions in the programs he cares about, he's going to need to increase taxes on people with more modest incomes. If so, there's no time like the present to make that clear.

1 comment:

JG said...

I'd think a bigger concern for the "progressive" left would be, why are we taxing the poor to make transfers to the rich?

Why are Warren Buffett's employees at Dairy Queen paying double-digit payroll tax from the first dollar of their wages to pay for Warren Buffett's Social Security and Medicare benefits?

Not why isn't Warren paying more, but why is he receiving so much from those poorer than him?