Well, it’s not so much a tax increase as increasing those who pay the tax. I already do.
What I’m talking about is the Lindsey Graham idea to increase the social security tax bracket. Currently it is set at just over $80,000.00. It is indexed to increase to over $110,000 in the next ten years. But, by increasing it now, we’d be able to raise the money to offset the transition to private accounts.
Read George Will here for more.
He says this:
In 1994, when a 39-year-old state legislator was asked in Aiken, S.C., how he was enticing voters to make him the first Republican elected to Congress from that district since Reconstruction, he said: “I’m one less vote for an agenda that makes you want to throw up.” Lindsey Graham won, and in 2002, advocating voluntary personal retirement accounts funded by a portion of individuals’ Social Security taxes, he won a Senate seat. Now he has an idea that makes some Republicans throw up: Raise the current $90,000 limit on income subject to Social Security taxes.
Republicans who throw up should grow up. Intelligent people can differ about whether Graham’s suggestion is economically unwise or politically imprudent. However, it hardly blurs the distinction between conservatism and Bolshevism.
The Social Security tax rate has been increased 20 times in 70 years, and the cap on income subject to the tax is indexed to average wages and adjusted annually. It was $4,200 when Graham was born in 1955, $60,600 when he was elected to Congress and $84,900 in 2002. It is projected to rise to $100,200 in 2008 and $121,800 in 2013.
Suppose it were immediately raised to $162,000 — a senator’s salary — but not indexed. That would be, effectively, a temporary tax increase. The increased revenue — $525 billion over 10 years — would more than cut in half the borrowing required to cover the transition costs during the phase-in of personal accounts.