New York tax filers reporting more than $375,000 a year in earned income may end up paying nearly 60% of their wages in taxes to the government under a Barack Obama presidency, economists who have analyzed his plan said.
The Democratic presidential candidate is proposing not only raising the federal income tax, but also adding a Social Security tax for those Americans earning more than $250,000 a year. For New Yorkers, that could mean that if the current Social Security rate is applied, the marginal tax rate, or rate on every extra dollar earned, could rise to 58%.
"This is a very eye-popping number," a resident scholar at the American Enterprise Institute, Alan Viard, said.
Under current law, there is a 12.4% Social Security tax on salaries up to $102,000 a year. While the Social Security tax is split equally between employers and employees, economists widely hold that employees shoulder the entire tax burden because employers simply pass along the cost of the tax in the form of lower wages.
Did you catch that--IF the current rate is applied. Not "when" the current rate is applied in a specific plan. "If" the rate is applied. The Obama campaign has no such plan, of course--
The Obama campaign said it is too early to know the exact marginal tax rate because no plan has been finalized. "There is not a specific plan, it is something that Obama would want to work together with Congress to figure out," the economic policy director for the Obama campaign, Jason Furman, said. In respect of the payroll tax rate on income above the doughnut hole, he said, "some of the plans we are looking at, and we are looking at a range of plans, think Congress might like to have rates that are in the neighborhood of 2% to 4%." He added that the plan could also be phased in over a period of years.
Goodness, the poor, poor rich people. Years of living in fat city with ridiculous low tax rates are their entitlement, you see, and those nasty Democrats are going to confiscate all the wealth in the land and give it to welfare queens, of course.