MSNBC: Bush weighs Social Security tax hike on some
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From MSNBC (headline is linked) -- originally from Associated Press:
Bush weighs Social Security tax hike on some
New Hampshire is eighth state to hear his plan
The Associated Press
Updated: 1:44 p.m. ET Feb. 16, 2005
PORTSMOUTH, N.H. - President Bush says he has not ruled out raising taxes on those who earn more than $90,000 a year to help bolster Social Security’s finances.
Under the current system, payroll taxes are paid only on the first $90,000 in wages. Bush has repeatedly said that he opposes raising taxes, but his advisers have been intentionally vague about whether he would also rule out subjecting a greater share of pay to the existing tax.
Asked directly, Bush said that he would not rule out raising that cap, though he does not want to see the payroll tax rate go up. The rate is now 12.4 percent of pay, split between workers and employers.
“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 told a roundtable of regional newspapers, according to an account Wednesday in the New Haven (Conn.) Register.
... more at linked article
This is almost exactly where I expected this issue to go in order to reach an amicable solution. See prior articles discussing Sen. Lindsey Graham's similar proposals. (See: Excellent column on Social Security Reform, and more... Robert Novak on Sen. Lindsey Graham's ambitious plan, and more...)
To those that have been questioning where the transition costs were gonna come from, this is your answer. Raise the cap on wages subject to social security taxes and take the extra income that comes from that source to pay for the transition costs.
It can be said to a large extent that the persons that make more than $90,000 per year are the ones most likely to benefit from the changes that Pres. Bush has proposed anyway. This puts the burden onto those wage earners to help fund the transition for all. It would have populace support, since the tax would only hit "the wealthiest earners" while offering these new opportunities to everyone. Lower to middle level income workers wouldn't see any change in the amount of money they pay into the system, while higher income workers would see their pay checks decreased because of the raising of the cap.
In reality, anyone that is truly interested in "fairness" doesn't want a cap for wages applicable for social security taxation anyway. The cap was there to be fair to those that paid into the system because those individuals could never possibly get back the amount they paid in, and the situation gets worse with any increase in dollars they pay into the system. While that would still be true, taxes that carve out exceptions for "rich" people are never going to be fair. The idea of a fair tax system is one in which everyone pays the same percentage, and everyone pays on every dollar they make.
It's time to really consider this solution, and, in my mind, not just consider it, but implement it. Use this method to fund the transition costs that are being bandied about. The amount of money that could come in should be easily raised by this approach, and everyone would benefit.
Implement a TSP (Thrift Savings Plan, the Federal Government Retirment system) type system for all of the United States and away we go.
Lets get this party started!
Bush weighs Social Security tax hike on some
New Hampshire is eighth state to hear his plan
The Associated Press
Updated: 1:44 p.m. ET Feb. 16, 2005
PORTSMOUTH, N.H. - President Bush says he has not ruled out raising taxes on those who earn more than $90,000 a year to help bolster Social Security’s finances.
Under the current system, payroll taxes are paid only on the first $90,000 in wages. Bush has repeatedly said that he opposes raising taxes, but his advisers have been intentionally vague about whether he would also rule out subjecting a greater share of pay to the existing tax.
Asked directly, Bush said that he would not rule out raising that cap, though he does not want to see the payroll tax rate go up. The rate is now 12.4 percent of pay, split between workers and employers.
“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 told a roundtable of regional newspapers, according to an account Wednesday in the New Haven (Conn.) Register.
... more at linked article
This is almost exactly where I expected this issue to go in order to reach an amicable solution. See prior articles discussing Sen. Lindsey Graham's similar proposals. (See: Excellent column on Social Security Reform, and more... Robert Novak on Sen. Lindsey Graham's ambitious plan, and more...)
To those that have been questioning where the transition costs were gonna come from, this is your answer. Raise the cap on wages subject to social security taxes and take the extra income that comes from that source to pay for the transition costs.
It can be said to a large extent that the persons that make more than $90,000 per year are the ones most likely to benefit from the changes that Pres. Bush has proposed anyway. This puts the burden onto those wage earners to help fund the transition for all. It would have populace support, since the tax would only hit "the wealthiest earners" while offering these new opportunities to everyone. Lower to middle level income workers wouldn't see any change in the amount of money they pay into the system, while higher income workers would see their pay checks decreased because of the raising of the cap.
In reality, anyone that is truly interested in "fairness" doesn't want a cap for wages applicable for social security taxation anyway. The cap was there to be fair to those that paid into the system because those individuals could never possibly get back the amount they paid in, and the situation gets worse with any increase in dollars they pay into the system. While that would still be true, taxes that carve out exceptions for "rich" people are never going to be fair. The idea of a fair tax system is one in which everyone pays the same percentage, and everyone pays on every dollar they make.
It's time to really consider this solution, and, in my mind, not just consider it, but implement it. Use this method to fund the transition costs that are being bandied about. The amount of money that could come in should be easily raised by this approach, and everyone would benefit.
Implement a TSP (Thrift Savings Plan, the Federal Government Retirment system) type system for all of the United States and away we go.
Lets get this party started!