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Obama WILL raise or eliminate the cap on Social Security taxes- he has promised to do so. This means that Social Security taxes, which are currently paid at 12% by the self-employed and 6% by employees, up to 97K in annual earnings, would be paid on all gross earnings up to 250K, or on ALL earnings, another idea of his. Business owners, small and large alike, also have to match their employees' contributions! While taxing the "rich" is a popular approach, this enormous tax hike would seriously damage the U.S. economy while doing nothing to address it's abusers.

Eliminating the cap on payroll taxes would be, by far, the biggest tax hike in U.S. history: more than $1.3 trillion in new taxes over the first 10 years alone.

Raising the tax cap would not just hurt the super rich, as Obama argues, but would fall most heavily on the upper middle class. Some 9.2 million Americans would see their taxes increased. Small businesses would be particularly hammered: about one-third of the workers affected by raising the cap would be small business owners. These are the people who already carry the largest tax burden, proportionately, and who contribute the most to the economy through business services, overhead to supporting industries, JOBS, insurances, and charity. They do 80% of the business in this country, on average.

Eliminating the cap would saddle the United States with the highest marginal tax rate in the world, higher even than countries like Sweden. It would cost the United States as much as $136 billion in lost economic growth over the next 10 years, and as many as 1.1 MILLION lost jobs!

Eliminating the cap would result in only eight additional years of cash-flow solvency. That's very little gain for so much pain. Obama showed his ignorance of this during the debates with Hillary, and of his ignorance of how payroll taxes work in general. Just pay more into it- that's his answer for everything.

Eliminating the cap would not address Social Security's other problems, either. It would not enable workers to decide how their money is invested. It would not allow low- and middle-income workers to accumulate a nest egg of real, inheritable wealth. It would not improve Social Security's rate of return for younger workers. It would not ensure that people who have paid in could collect. It would not do anything about the gross abuse of SS funds by people who it was never meant to support, such as drug addicts and illegals, who take a huge drain from Disability benefits, among other ridiculous payouts.

Obama should be confronted on this issue. I hope McCain does. Do Americans want a massive tax hike in exchange for propping up the current Social Security system for a few more years? Or do they want fundamental reforms that give them more ownership and control of their money?

We know what Obama wants.

Raysmom's Blog

Obama and Social Security

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