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." ...
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.