Not this whole business of diverting payroll taxes to stock market accounts. That just makes the financing of SS worse. But his embrace of the Pozen proposal for progressive price indexing is a very encouraging, and surprising, sign.
Though we tend to reflexively oppose Bush on anything he says, shouldn’t we be a bit relieved that after making the income tax decidedly less progressive, Bush plans to make SS more progressive? I’ve said for years that we should make two simple changes to the program that would make it last forever:
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(1) FICA should not be assessed on the first $20K of earnings, but there should be no wage cap on how high earnings can be and be taxed. Let the CEOs making millions in salary pay FICA on every cent.
(2) Means testing for benefits. The details can be worked out, but no one who has a fat pension or IRA ought to get a dime of Social Security. It’s supposed to be an antipoverty program for the elderly, not an extra pension for rich retirees.
Bush’s proposal doesn’t go this far, of course, but then neither do the Democrats (who have become increasingly beholden to affluent urbanite donors). In fact, if you look at the article I linked above, Republicans are more open to changes toward greater progressivity in the program than Democrats are! That’s pretty frickin’ sad if you ask me.
