Barack Obama has unveiled his plan for saving Social Security and it consists, unsurprisingly, of a massive tax increase. In addition to his plans for raising tax rates on capital gains and dividend income and repealing the Bush tax cuts, Obama now proposes to increase the amount of income subject to Social Security payroll (FICA) taxes.Under current law, Social Security taxes (6.2% for both employers and employees) are imposed on income up to $102,000, which is indexed for inflation in future years. Obama claims 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."  For some time, Obama’s website has stated that he “supports increasing the maximum amount of earnings covered by Social Security” as part of a plan to strengthen the system’s long-term solvency. This would have the...(Read Full Post)