The first mystery is what his Social Security plan actually is. In the primaries, he said he would be open to the idea of applying Social Security taxes to a larger percentage of high earners’ wages. Recently, he has gotten a tiny bit more specific. Those taxes currently apply to the first $102,000 of earnings. Obama would continue to leave wages between $102,000 and $250,000 untaxed–but levy a tax on wages above $250,000. He has not, however, specified what rate those high-end wages would be taxed at or whether people would earn higher benefits for making higher payments, among other things. It’s not really a plan, in other words, although I suppose it is more of one than McCain has outlined.
The second mystery is what Obama thinks he is accomplishing by floating this idea. If he means to lay the groundwork for actually achieving a Social Security tax hike on high earners in 2009, then I don’t see how he has done it by adding one little data point to his plan beyond what he had already said in the primaries. I don’t see what he is achieving politically, either. He is opening himself up to the charge of bringing the top tax rate back to 1970s levels, and on the asset side of the ledger he gets to say that he solves part of Social Security’s long-term shortfall. What does that get him?