March 17, 2005


Lindsey Graham's Good Idea (George F. Will, March 13, 2005, Washington Post)

In 1994, when a 39-year-old state legislator was asked in Aiken, S.C., how he was enticing voters to make him the first Republican elected to Congress from that district since Reconstruction, he said: "I'm one less vote for an agenda that makes you want to throw up." Lindsey Graham won, and in 2002, advocating voluntary personal retirement accounts funded by a portion of individuals' Social Security taxes, he won a Senate seat. Now he has an idea that makes some Republicans throw up: Raise the current $90,000 limit on income subject to Social Security taxes.

Republicans who throw up should grow up. Intelligent people can differ about whether Graham's suggestion is economically unwise or politically imprudent. However, it hardly blurs the distinction between conservatism and Bolshevism.

The Social Security tax rate has been increased 20 times in 70 years, and the cap on income subject to the tax is indexed to average wages and adjusted annually. It was $4,200 when Graham was born in 1955, $60,600 when he was elected to Congress and $84,900 in 2002. It is projected to rise to $100,200 in 2008 and $121,800 in 2013.

Suppose it were immediately raised to $162,000 -- a senator's salary -- but not indexed. That would be, effectively, a temporary tax increase. The increased revenue -- $525 billion over 10 years -- would more than cut in half the borrowing required to cover the transition costs during the phase-in of personal accounts. [...]

The tax increase from lifting the cap to $162,000 would be paid mostly by Republicans -- but also by the people most able to put substantial sums into the personal accounts that might become politically feasible only by raising the cap. There would be additional recompense for Republicans: American society would become more congruent with Republican values, and more equity-owning citizens would become disposed to vote Republican.

Mr. Will stumbles onto the President's secret.

Posted by Orrin Judd at March 17, 2005 1:36 PM

Shameless self-reference - in 1994 I was living in Aiken, SC, and shook hands with Lindsey Graham when he came to meet a friend & colleague who had done yeoman work for the Graham campaign. I liked Graham then and still do.

Posted by: Bruce Cleaver at March 17, 2005 1:42 PM

Sure, why not? Nothing we (wife and I), two self-employed individuals, would like better than to contribute even more money each year. Who wouldn't want to purchase an annuity that costs more each year in the present than it will pay out in the future?

Posted by: Rick T. at March 17, 2005 4:42 PM

To own is to love it.

Posted by: ghostcat at March 17, 2005 7:33 PM