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An Important Question for Obama
June 13th 04:13:54 PM

McCain and Obama have begun sparring over Social Security reform, and we'll soon be writing about the differences between their plans.  But there is an important question for Obama, who today offered specifics on his plan to raise Social Security taxes on those making over $250,000.

The question is: Is that $250,000 indexed?

This is the same question we asked Sen. John Edwards when he was advocating the same idea during his campaign.  Edwards didn't have an answer.

The reason the question is important is because the "donut hole" gets smaller and smaller every year if there is no indexing.  For example, the donut hole last year would have been $97,500 - $250,000, whereas this year it would be $102,000 - $250,000.  Given that same rate of increase in the lower threshold, the donut hole disappears in 20 years. 

In other words, if the donut hole is such a good idea, then the $250,000 will have to be indexed.  And if the $250,000 is indexed, Obama's plan will help Social Security even less than has been projected.

Posted by Ryan Lynch


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