In his Newsweek column, George Will falsely claimed that Social Security taxes are levied on household income. He had similarly falsely asserted on ABC's This Week that Sen. Barack Obama "wants to raise taxes on a lot of people, beginning with those earning about $100,000 a year, a household." In fact, Social Security taxes are levied based on individual income, and contrary to his assertion in Newsweek, a married couple with each spouse making less than $102,000 would not face a payroll tax increase if the income cap was raised, even if combined they made more than the current cap.
In his column for the May 5 issue of Newsweek, titled "Questions for Obama," Washington Post columnist George Will, a contributing editor and columnist at Newsweek, falsely claimed that Social Security taxes are levied based on household income, asking Sen. Barack Obama: "You favor eliminating the cap on earnings subject to the 12.4 percent Social Security tax, which now covers only the first $102,000. A Chicago police officer married to a Chicago public-school teacher, each with 20 years on the job, have a household income of $147,501, so you would take another $5,642 from them. Are they undertaxed? Are they rich?" In fact, as Media Matters for America Senior Fellow Duncan Black noted in flagging the Will column, Social Security taxes are levied based on individual income.
Will had made a similar assertion on the April 20 edition of ABC's This Week, during a roundtable discussion of the April 16 Democratic presidential debate, saying of Obama: "[O]n raising Social Security taxes -- or the body of income susceptible to the 12.4 percent rate -- he clearly says he's considering raising taxes on those making more than $103,000, much less ... than what he had at $200,000." Will later falsely asserted of Obama: "[W]hat we heard this week from the probable Democratic nominee is that he wants to raise taxes on a lot of people, beginning with those earning about $100,000 a year, a household [emphasis added]." He added: "That's a Chicago cop and a Chicago teacher."
The Social Security Administration booklet, "Understanding The Benefits," describes Social Security taxes as follows: "You pay Social Security taxes on your earnings up to a certain amount. That amount increases each year to keep pace with wages. In 2008, that amount is $102,000 [emphasis added]." The booklet also says of Social Security taxes, "You and your employer each pay 6.2 percent," and "If you are self-employed, you pay 12.4 percent." Indeed, according to Section 3101 of the Federal Insurance Contributions Act:
(a) Old-age, survivors, and disability insurance
In addition to other taxes, there is hereby imposed on the income of every individual a tax equal to the following percentages of the wages (as defined in section 3121(a)) received by him with respect to employment (as defined in section 3121(b)) --
In cases of wages received during: The rate shall be:
1984, 1985, 1986, or 1987................ 5.7 percent
1988 or 1989................................... 6.06 percent
1990 or thereafter............................. 6.2 percent.
Obama's campaign website similarly makes clear that he supports "increasing the maximum amount of earnings covered by Social Security" above the current level of "the first $102,000 a worker" -- not a household -- "makes." When asked, during the last Democratic debate, about raising the cap on Social Security taxes, Obama said that he would consider a "donut hole," exempting from a tax increase those making less than $200,000 or $250,000.
In a May 2 washingtonpost.com "Post Politics" chat, a reader wrote that, in his Newsweek column, "Will demonstrates he clearly has no concept at all on how Social Security taxes work," and asked Post congressional reporter Jonathan Weisman: "I just wonder how many reporters will be duped by this erroneous GOP talking point, as has Will in such and obvious and embarrassingly public fashion?" Given the opportunity to note Will's error, Weisman instead replied: "How many reporters have you seen jumping on it? Look, among reporters who cover issues like Social Security earnings caps, there's a pretty clear understanding that the median income in the United States is around $44,000. Certainly, an income over $100,000 is pretty common on the coasts, but we're not so stupid that we believe we are representative."
From the April 20 edition of ABC's This Week with George Stephanopoulos:
GEORGE STEPHANOPOULOS (host): Here to debate everything about the debate, I'm joined, as always, by George Will, Cokie Roberts, and Sam Donaldson. Welcome you all to our new home.
ROBERTS: It's great here.
STEPHANOPOULOS: So, George, Wednesday night: first impression, last impression.
WILL: In 21 debates, the two most interesting and revealing questions were asked in this debate, and they were not about his friends or his lapel pins, they were about policy.
One was on capital gains, where he conceded the premise of the question -- as he should, because it's true that when you raise capital gains taxes -- rates, you lower revenues from that -- and said he'd do it anyway. Even if it reduced the return on American investment, even if it cost the government revenues, he'd do it out of some abstract commitment to fairness. And then on raising Social Security taxes -- or the body of income susceptible to the 12.4 percent rate -- he clearly says he's considering raising taxes on those making more than $103,000, much less --
STEPHANOPOULOS: Let me throw you the question --
WILL: -- than what he had at $200,000.
SAM DONALDSON (ABC News national correspondent): Well, now, if he's the most left-wing candidate, and you look at elections -- beginning with George McGovern, at least -- and say, when the Democrats put up someone who's far to the left, they don't win -- why do you think Obama can win?
WILL: I'm not sure he can. He's beginning to convince me he has a problem, because this remains a center-right country. And while Cokie's right that people evaluate in a presidential candidate go for a gut check, that gut check involves who he is, but who he or she is because of what they believe in. And what we've heard this week -- we'll come to Mr. McCain in a minute -- what we heard this week from the probable Democratic nominee is that he wants to raise taxes on a lot of people, beginning with those earning about $100,000 a year, a household. That's a Chicago cop and a Chicago teacher.
From ABC's broadcast of the April 16 Democratic presidential debate:
OBAMA: What I have proposed is that we raise the cap on the payroll tax, because, right now, millionaires and billionaires don't have to pay beyond $97,000 a year.
That's where it's kept. Now, most firefighters, most teachers, you know, they're not making over $100,000 a year. In fact, only 6 percent of the population does. And I've also said that I'd be willing to look at exempting people who are making slightly above that.
But understand the alternative is that because we're going to have fewer workers to more retirees, if we don't do anything on Social Security, then those benefits will effectively be cut, because we'll be running out of money.
GIBSON: But Senator, that's a -- but that's a tax. That's a tax on people under $250,000.
OBAMA: Well, no, look, let me -- let me finish my point here, Charlie. Senator Clinton just said she certainly wouldn't do this; this was a bad idea. In Iowa, she -- when she was outside of camera range -- said to an individual there, she'd certainly consider the idea. And then that was recorded, and she apparently wasn't aware that it was being recorded.
So, this is an option that I would strongly consider, because the alternatives -- like raising the retirement age, or cutting benefits, or raising the payroll tax on everybody, including people who make less than $97,000 a year --
GIBSON: But there's a heck of a lot of --
OBAMA: -- those are not good policy options.
GIBSON: Those are a heck of a lot of people between $97,000 and 200 and $250,000. If you raise the payroll taxes, that's going to raise taxes on them.
OBAMA: And that's -- and that's -- and that's why I've said, Charlie, that I would look at potentially exempting those who are in between.
But the point is, we're going to have to capture some revenue in order to stabilize the Social Security system. You can't get something for nothing. And if we care about Social Security, which I do, and if we are firm in our commitment to make sure that it's going to be there for the next generation, and not just for our generation, then we have an obligation to figure out how to stabilize the system.
And I think we should be honest in presenting our ideas in terms of how we're going to do that and not just say that we're going to form a commission and try to solve the problem some other way.
From Weisman's May 2 "Post Politics" chat:
Boston: In your sister publication Newsweek, Post columnist George Will demonstrates he clearly has no concept at all on how Social Security taxes work. However, he trots out a scenario I have heard a few GOP flacks use: a married couple -- one a cop, one a teacher -- both with long tenures and higher pay, and how they would be hit by removing the Social Security earnings cap from it's current $102,000. Now, I know from your intelligence and your wife's economic wisdom, you know better. I just wonder how many reporters will be duped by this erroneous GOP talking point, as has Will in such and obvious and embarrassingly public fashion?
washingtonpost.com: Questions for Obama (Newsweek, May 5 issue)
Jonathan Weisman: How many reporters have you seen jumping on it? Look, among reporters who cover issues like Social Security earnings caps, there's a pretty clear understanding that the median income in the United States is around $44,000. Certainly, an income over $100,000 is pretty common on the coasts, but we're not so stupid that we believe we are representative.