Wall Street Journal editorial, Obama’s Tax Max: The President Floats Another Payroll Tax Hike:

President Obama’s deficit pitch is that if only a fraction of the highest income Americans were “asked to pay a little bit more” the fiscal seas would part—but all those little bits are starting to pile up. Speaking Tuesday in Annandale, Virginia, Mr. Obama came out for lifting the cap on income on which the Social Security payroll tax is applied.

Currently, the employer and employee each pay 6.2% up to $106,800, a level that rises with inflation each year. … Mr. Obama didn’t hint at specifics, though he did run in 2008 on a plan to raise the “tax max” by somewhere between two to eight percentage points for the top 3% of earners. But whatever he means, let’s underscore what a dramatic departure from current tax policy Mr. Obama is so casually floating.

For starters, if the White House wants to lift the cap for high earners but doesn’t upcap benefits for a corresponding increase, it would change Social Security from a quasi-insurance program, in which there is at least some connection between the taxes paid on wages in return for benefits, into a welfare transfer program. …

[M]ost of the increase could be paid by the middle class or modestly affluent—i.e., those who merely make somewhat more than $106,800. A 6.2% additional hit on every extra dollar they make above that level is a huge reduction from their take-home pay.