It is commonly observed that the policy ideas of Barack Obama and Hillary Clinton are almost identical, but Obama does have one major tax proposal that Clinton does not specifically endorse: eliminating the wage ceiling for Social Security taxes. ...
[T]here has always been a ceiling on the tax, an amount of annual wages above which the tax does not apply. Right now, the wage ceiling is quite high, $102,000 for a single person ... In 2008, the maximum Social Security tax for a single person is 12.4% of the first $102,000 in wages, or $12,648.
Reporters have asked Obama how he can propose to abolish the wage ceiling and also keep his promise not to raise taxes on anyone who makes less than $200,000 or $250,000 (Obama has cited both figures). His response is that he might campaign for a "donut hole" in the Social Security tax. That is, wages up to the ceiling would be taxed as usual, followed by a non-taxable amount up to $200,000 or $250,000, and then all wages above that would be taxed.
In the table below we give a state-by-state breakdown of those three scenarios: (1) wage ceiling is eliminated, (2) wage ceiling eliminated but with a donut hole up to $200,000, and (3) wage ceiling eliminated but with a donut hole up to $250,000.
Here are the ten states that would be hardest hit by Obama's proposal (along with the percentage of the state's workers who would see their taxes increase under the Obama plan):
Here are the ten states that would be least affected by Obama's proposal (along with the percentage of the state's workers who would see their taxes increase under the Obama plan):