A Barack Obama presidency would cost America's entrepreneurial class dearly. Obama has pledged to lift the current cap on Social Security taxes if he becomes president. He'd get support in that venture from a Democratic-controlled Congress. According to the Social Security Administration's website, this means an additional 15.3 percent tax for self-employed people making more than $102,000 annually.
"The Social Security tax rate for 2008 is 15.3 percent on self-employment income up to $102,000," the site notes. "If your net earnings exceed $102,000, you continue to pay only the Medicare portion of the Social Security tax, which is 2.9 percent, on the rest of your earnings."
Latte liberals now supporting Obama who are self-employed (consultants, lawyers, doctors, self-employed entrepreneurs) who earn, for example, $200,000 per year, will pay more than $15,000 in additional federal taxes if Obama is elected and succeeds in lifting the cap. That's quite a disincentive to work hard and earn above $100,000 annually. That's also a disincentive for self-employed small-business owners, who produced the lion's share of new employment during the past decade.
Despite Senator Obama's claim that Americans earning $200,000 or more are rich or in the "CEO" class, many of them live financially pinched existences. Consider the situation of a self-employed married saleswoman living in New York City or San Francisco or Chicago. She's the sole breadwinner for her husband and two children. She earns $200,000 per year, but she is hardly rich. If she owns a home at all (purchased since the last run-up in real estate prices) it may be a small apartment in the suburbs or exurbs, but certainly not a townhouse downtown. She's probably living paycheck to paycheck.
Yet Senator Obama told CNN that these are the people whose income he intends to go after:
OBAMA: I will raise CEO taxes, there is no doubt about it. If you are...
BLITZER: What about the average American?
OBAMA: If you are a CEO in this country, you will probably pay more taxes. They won't be prohibitively high. You're going to be paying roughly what you paid in the '90s when CEOs were doing just fine...If you're making $100,000 a year or less, then you're pretty solidly middle class and you deserve relief right now as opposed to paying higher taxes. On the other hand, if you're making more than $100,000 and certainly if you're making more than $200 to $250,000, then you're doing pretty well...
This is the kind of rhetoric that killed Walter Mondale's 1984 presidential campaign and will make it very difficult for any Democratic president to get through a general election, even now.
On the other hand, pro-environment, pro-choice, progressive voters have nowhere else to go. Senator McCain won't clobber them financially, but he's hardly supportive of a progressive or even mainstream agenda on social issues. Sounds like write-in time. Or a ripe environment for a third-party challenge.