Read my lips: No expanded payroll tax
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Read my lips: No expanded payroll tax
TESS VIGELAND: The Bush Administration’s plan to save social security rested on the idea of personal savings accounts. Didn’t get a whole lot of traction. And we haven’t heard many new ideas since then. But the president is now saying he’s willing to hear out Democratic solutions, including tax increases. Commentator Steve Moore says if that’s really the case, the party’s over.
STEPHEN MOORE: Right now Americans pay the 12.4 percent payroll tax on all incomes up to $94,200. Some politicians want this tax to apply to all income Americans earn. They also want to cut future benefit promises.
This policy would harm our economy.
Let’s be honest: What we’re really doing is forcing our kids to pay for a ponzi scheme retirement program invented by FDR and never fixed in the 70 intervening years.
Social Security is supposed to be a pension plan where the taxes you pay are linked to the benefits you get when you retire.
But this way, middle- and upper-income Americans will be getting back less than a buck for every $5 they put into the system. Not a very good rate of return.
If we want to simply redistribute income from the rich to the poor, fine. But we should stop pretending this is a retirement plan for all.
And by the way, the vast majority of Americans who would pay this higher tax have an income between $100,000 and $200,000 a year. They’re not multimillionaires like Barry Bonds or Barbra Streisand.
Mr. Bush cut income tax rates by between 5 and 10 percentage points across the board and that helped spark a potent economic expansion with very low unemployment and 7 million new jobs.
This payroll tax scheme would raise tax rates by 12 percent points on many of us.
If that happened, tax rates would be higher on middle- and upper-income workers than they were, not just under Bill Clinton, but in the dark days of Jimmy Carter.
That’s hardly the tax legacy Mr. Bush should want to leave. And history proves it’s a sure way for Republicans to lose in 2008.
This president should remember his father’s famous line about never raising taxes: Read my lips.
VIGELAND: Steve Moore is a member of the Wall Street Journal editorial board.
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