Saturday, November 17, 2007

More FICA

Below I get some actual traffic for a post in which I defend Barack Obama from complaints that he is falsely claiming that social security is in crisis. I definitely agree that there is no social security crisis. I didn't discuss whether Obama claimed there was one. IIRC he didn't say anything which I consider false.

My point (if any) was that his proposed remedy is good policy. He proposes raising (eliminating ?) the cap on earnings subject to payroll taxes. I also think this is good politics. This tax increase will hit people who are considered middle class by themselves and the opinion elite. I think it will be very very pleasant to be able to debate progressivity with Republicans after getting the overall unified budget into something close to balance. Using the social security age and disability pension surplus to balance other deficits is fine by me so long as the President is named Obama. That is the case in which it really matters what Obama says now.

The alternative is to declare oneself to be totally out of touch with almost all of America as Hillary Clinton just did. She argued that people with income over the FICA cap ($97,500) aren't all particularly rich. They are the top 6% of earners according to Garance Franke-Ruta who explains.

Hillary Clinton's opposition, during last night's debate, to raising the Social Security payroll tax cap was taken to task by Iowa Independent's Doug Burns as being a pander to people in the wrong state. Clinton said of the proposed tax increase on those who earn over $97,500:

It is absolutely the case that there are people who would find that burdensome. I represent firefighters. I represent school supervisors. I'm not talking -- and, you know, it's different parts of the country. So you have to look at this across the board and the numbers are staggering.


To which [the Iowa Independent's Doug] Burns replied:

Is $97,000 a lot of money? In most of Obama's Illinois and just about all of Iowa, the answer to that is "yes," which makes Obama's position on the question of whether to raise or lift the cap on Social Security taxes more reasonable to Hawkeye State voters than the New York shape-shifting of Clinton.

[snip]
She suggested that popping the cap would hurt middle-class Americans and argued that in some parts of the nation (namely high-priced New York City which she represents) $97,500 isn't a lot of money. It would be interesting to hear her make that argument in Audubon County, Iowa, where the average home is worth half that much: $49,000.

OK this is what Democratic candidates must *not* do. Hillary Clinton said "forget about Iowa I want to talk about New York City". Also she tried to convince voters that people who personally earn over $97,500 really need the money. This will not win her the votes of people who earn *much* less than that, that is almost all voters in America.

If Hillary Clinton really thinks that an individual labor income of over $97,500 is perfectly normal, she has to hide that fact to win elections.

Look Barack Obama said he wanted to raise taxes paid by high income Americans. When polled a solid majority of Americans support his proposal (60%) but for some reason the blogging left is upset with him. What kind of left is that ?

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