Obama campaign on taxes...

HONOLULU (Reuters) - Barack Obama's presidential campaign said on Thursday a potential hike in payroll taxes for wealthy Americans under an Obama administration would not occur for 10 years while taxes on dividends and capital gains would be capped at 20 percent.
(snip)

"Sen. Obama believes that one of the principal problems facing the economy today is the lack of discretionary income for middle-class wage earners," Obama economic policy director Jason Furman and senior economic adviser Austan Goolsbee wrote in the Wall Street Journal.

"That's why his plan would not raise any taxes on couples making less than $250,000 a year, nor on any single person with income under $200,000 -- not income taxes, capital gains taxes, dividend or payroll taxes."

http://news.yahoo.com/s/nm/20080815/pl_nm/usa_politics_obama_dc

I am hoping that someone with a little more economic smarts can explain to me a couple of things:

1. If 200-250K is not enough (discretionary) income, than what is?

2. How does putting something off for 10 years (given that he could serve for eight) help anything?

3. Does he truly believe that the economic problems facing this country are due in large part to a "Lack of discretionary" income?
-If this is the case, then I'm a little concerned about the out-of-touchness of the campaign...

1. 200-250K is relative as to how much income this is. I believe that this limit is for a married couple. Add some kids to the equation, and that is not as much money as it might seem. In California, one might buy a home costing $600,000 and that would be most likely in a low rent neighborhood or way out in the burbs. When one looks at mortgage payments plus real estate taxes plus insurance for such a dwelling, one could easily spend 50,000 to 60,000 just on housing alone. Add one or two kids in college, a health care plan with dental, or some child care, auto payments, utilities, etc... and the money that you speak of doesn't necessarily leave quite as much as one would want to think it will. This limit was what Bush and later most Democrats used as the marker that separates 99% of Americans to the wealthiest 1%.

2. In reference to a hike in payroll taxes, he has mentioned a possible raising of the current Social Security ceiling for FICA payments......but he obviously doesn't feel it needs to be done till Social Security needs the increase in order to remain solvent. Mid to End Baby Boomers have about another 10 to 15 years to go to reach retirement age. 10 Years from now is when we will hit the Social Security payout peak, I believe....and when more money will be required to be taking in based on what is going out.

3. Lack of discretionary income means less money for things at one's discretion....like retail purchases of clothes, new cars, stereo equipment, taking vacations, etc.... If the economy for most does nothing more than pay for the necessities such as food, gas, utilities, and shelter, and not much more, that action stops the economy from growing. It is those discretionary items that we purchase that provides a sound economy. When people stop going on vacation, to the movies, to restaurants, or don't buy that new car or new furniture, then the economy slows down (and that is what is happening). No leader of any country should be satisfied if the economy of the nation that they are leading stood still, even if everyone could afford the necessities but not the discretionary stuff. If this was the case for any extended length of time, our economy would gravely suffer, some sectors more than others, but eventually every sector would suffer. That may have been his point.

My parents are retired public school teachers and they make almost that much just from their retirement.