Barack Obama promised during the campaign to shore up Social Security by lifting the payroll tax cap on people with earnings above $250,000.
A quick primer on Social Security: Social Security is a program, started in 1935, that sends cash payments to seniors based on the taxes they paid toward Social Security when they were working. The current tax rate for Social Security is 6.2 percent on the first $106,800 of wages. (Fine print: Employers pay an additional 6.2 percent, and the self-employed have to pay 12.4 percent. The $106,800 is indexed to inflation, so it typically increases every year.)
Obama's proposal would be to tax wages above $250,000. Yes, this does create a weird doughnut hole on earnings between $106,800 and $250,000, but Obama wanted to keep
his pledge not to raise taxes on families who make less than $250,000
. PolitiFact has currently rated that promise Compromise.
We have been unable to find any proposals thus far in which the Obama administration proposes lifting this cap, and that includes its Treasury Department's "General Explanations of the Administration's Fiscal Year 2010 Proposals."
This issue may sound familiar because the Senate is currently considering increasing payroll taxes for people whose income exceeds $250,000 for Medicare's Hospital Insurance. The current rate is 1.45 percent; the Senate measure would raise it to 2.35 percent on people with higher incomes. But this is a different issue from Social Security taxes.
Confused? Look on your own pay stub if you get one. The line that represents Social Security taxes is usually labeled FICA OASDI, which stands for Federal Insurance Contributions Act Old-Age, Survivors, and Disability Insurance. The Medicare portion is usually labeled Medicare HI, for Hospital Insurance.
Still, we've seen no measurable progress or concrete proposal yet to lift the cap on Social Security payroll taxes. So we rate it Stalled.