Read My Lips
Hm, looking through the USA Today poll
on Social Security, a couple notable points jumped out at me:
65 percent of those making $75,000 or more thought it was a good idea to limit Social Security benefits for the wealthy
60 percent of those making over $75,000 support lifting the wage cap so that all income is subject to payroll tax, rather than just the first $90,000. (On the other hand, I'd like to see this subdivided between those making between $75k-$90k a year, and those for whom this law would actually make a difference, although obviously those making $75k now can realistically expect to get over $90k at some point.)
Only 49 percent of those making over $75k support private accounts.
Now the USA Today
write-up doesn't phrase those numbers in quite the same way I do—they suggest that low- and middle-income people are much more likely to support higher taxes—but really, when it comes down to it a very high proportion of affluent Americans want to fix Social Security the responsible way. A very high proportion.
Anyway, I've debated back and forth as to whether the Democrats should ever publicly propose to raise the wage cap. On the plus side, it's a clear and popular way to shore up the program that Bush couldn't co-opt. With this idea of add-on private accounts, I'm afraid the GOP could tentatively agree to the issue, and then sneak in some horrendous provisions to phase-out Social Security when this "bipartisan idea" snakes its way through Congress. The other "pro" of suggesting that we lift the wage cap is that Democrats could reintroduce the idea that raising taxes isn't the end of the fucking world. In fact, since the president has committed us both to big government and bogus entitlement "reform" costing a $1.2 trillion, raising taxes is the only way out of this deficit hole. Kneejerk opposition to the idea needs to be combatted at some point very soon. So let's start with a simple tax hike, one that enjoys wide popularity, and the most painless way to keep Social Security solvent for all eternity.
(Bear in mind, if Democrats were in any position to propose a policy that had an actual chance of passing, I'd prefer the Diamond/Orszag combination
of taxes and benefit cuts. Actually, no, I'd prefer my pet reform suggestions
. But all of this is fantasy anyway, so the Dems may as well propose a clear and easy-to-understand solution that a) would demonstrably bring Social Security into long-run balance, b) avoids the political backlash from proposing benefit cuts, and c) tries to cut into the "no new taxes" taboo.)
: There are two ways to lift the wage cap for payroll taxes. The first would subject all income to payroll taxes, but also raise benefits for high-income earners (since all
of their lifetime average salary would be used to calculate payouts, rather than merely the first $90k). That approach is somewhat "fairer," but it only fixes about 88 percent of the projected 75-year Social Security deficit. The alternative is to lift the cap but still calculate benefits using only the first $90k of salary. That
method fixes Social Security completely, but does broach some fairness issues. [UPDATE: All numbers taken from this
2002 SSA Report, page 26.]