President Bush insisted:
"We will not raise payroll taxes to solve this problem."
This is ostensibly in answer to Republican Senator Lindsey O. Graham's suggestion of lifting the ceiling on wages subject to payroll tax from $87,900 to $200,000.
The payroll tax, from which the money comes to fund Social Security, is extremely regressive. All those making more than $87,900 have less of their income taxed than those making less than that. So if you are a member of the working poor, making about $20,000 a year and struggling to put bread on the table, your tax is 6.2%. But if you make about $186,000 a year and are in great shape financially, your tax is half as large. And if you make $1 million your tax rate is insignificant.
Senator Graham is calling for people who earn more to pay a little more into the Social Security kitty. This is too much for Bush. His spokesman, McClellan said:
"The principles upon which the president is working are very clear to members of Congress. They know what his position is. If you're talking about raising payroll taxes, that is a payroll tax increase; the president would not be for that."
No. He wants a "baby tax" instead!
For four years, Bush has been offering the rich tax cuts to be financed by borrowing. At least the rich got something out of it. Now Bush is offering to reduce Social Security benefits by 1/3 - each citizen is supposed to invest roughly 1/3 of his own money in the casino called the stock market. What citizens will get out of it is unclear. Some say they will earn more, some say they will earn less - it's an uncertain future.
The only sure thing is that we will have a "baby tax."
Bush favors a "baby tax" for Social Security.
