Say no to higher payroll taxes

Dallas Blog | Tom Pauken:

“ The Wall St. Journal has an editorial in Wednesday's edition about the Democratic Congressional effort to push for a hike in payroll taxes in order to 'save Social Security'. What is troubling are reports that President Bush may be receptive to that bad idea. ... Liberals in Congress want to raise the cap on the payroll tax which currently is at $94,000. ”

Ed Cognoski responds:

Maybe a revenue-neutral scheme of a flat payroll tax on all incomes should be considered. The payroll tax on incomes less than $94,000 could be cut, benefiting the majority of workers. This wouldn't save Social Security, but it does move us closer to a flat tax, which I hear some say is a good thing. ;-)

The "solution" to saving Social Security is some kind of grand compromise involving reduced benefits, delayed benefits, raised taxes and possibly private accounts or beefed up IRA/Roth/401K/etc accounts. But compromise is impossible when vested interests have a stake in the status quo. Seniors and baby boomers (aka voters) want to keep things as they are until they collect (afterwards be d*mned). Opportunistic Democrats are inclined to support them as it helps them win elections. Ideological Republicans are inclined to support them, too, on the theory that the longer the status quo holds, the more likely Social Security will go bust and they can get rid of the safety net thing altogether. So, status quo wins, for a little longer anyway.