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Wednesday, February 16, 2005

Read His Lips
Posted by Jill | 5:32 PM

Some New Taxes????

Actually, this is something Bush could do that I'd favor:

President Bush (news - web sites) is not ruling out raising taxes on people who earn more than $90,000 as a way to help fix Social Security (news - web sites)'s finances.

At the same time, he renewed his pitch Wednesday for Congress to approve an overhaul that would include Social Security private accounts for many workers. He told 2,000 people in an airport terminal that rich and poor alike should have a chance to invest in the stock market.

"Investors aren't just Wall Street people, as far as I'm concerned," Bush told the crowd invited by the state's all-GOP congressional delegation. "I think every citizen, every citizen has got the capacity to manage his or her own money."

He gave only passing mention to options for fixing the program's long-term financial woes, but told reporters for regional newspapers on Tuesday that he isn't ruling out making more wages subject to Social Security taxes.

Asked directly, Bush said he would not bar raising the $90,000 cap, although he does not want to see the payroll tax rate go up.

"The one thing I'm not open-minded about is raising the payroll tax rate. And all the other issues go on the table," Bush said in the interview, according to an account in Wednesday's New Haven (Conn.) Register.

White House spokesman Trent Duffy said raising the cap on Social Security taxes is just one option among many being advocated.

"Just because he said it was an option doesn't mean he embraced it," Duffy added.

Under the current system, payroll taxes are paid only on the first $90,000 in wages. That ceiling rises each year with inflation — last year it was $87,100. The Social Security tax rate is now 12.4 percent of pay, split between workers and employers.

Sen. Lindsey Graham (news, bio, voting record), R-S.C., and other lawmakers have argued that Bush's plan for personal accounts, which will cost more than $1 trillion up front, would be more attractive to Democrats if it is financed by raising taxes on the wealthy.

If Congress did nothing but lift the cap entirely and therefore subjected all wages to the tax, Social Security would be financially balanced for 75 years, though the system would again face trouble after that, according to one economic analysis.


Of course he's talking out of both sides of his mouth here -- he wouldn't rule it out, but he's not open minded about it. This sounds to me like a trial balloon -- run it up the flagpole and see if anyone salutes.

Now if they want to give people a choice between the traditional Social Security program, financed with lifting the cap on the payroll tax, WITH NO BENEFIT CUTS, and taking a partial benefit cut in exchange for investing a piece of it on your own, that's an area where maybe something can be hammered out.

Of course this is never going to happen. This is a trial balloon so Bush can say he was willing to negotiate, knowing full well that the Republicans in Congress will never go along with anything that smacks even remotely of a tax hike.
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