Bob Novak's Sun-Times column here lays out Senator Lindsey Graham's plan (the only 'real' plan out there) for Wall Street to get their commission-greedy hands on Social Security: raise the cap of $87,900 on taxable income for Social Security.
Now, everyone pays 12.4% of the income to Social Security until one is paid $87,900. (So we all pay up to $10,900 to Social Security -- no more than that). If you're making more than 88 large, congratulations. You don't pay tax on that income. So if you make 200 grand or 100 grand or Blair Hull-like income of 10 million, you pay $10,900 in Social Security taxes.
No wonder there are long-term deficits in our public pension.
The Bushies and some GOP leaders want to make private accounts the centerpiece of the 2005-6 federal legislative session. where workers can take 3 or 4 or 5 percent of their income and pay Wall Street money managers to speculate or invest in different equities, with presumably a higher rate of return. Unless the stock market crashes, and then you're like an Enron shareholder. Broke. Anyway, the problem is the transition cost, because that 3 or 4 or 5 percent of income is not going to fund the benefits of Grandma and Grandpa, so how do benefits get paid if a third of all the income is diverted? Those transaction costs are probably a TRILLION dollars. Truh - hill - yun. Needless to say, if I were spending a trillion (three times the whole freakin' military), I could probably get us world peace. For real. Maybe that's a bit of a stretch. But we could largely eliminate poverty. I digress.
To raise the trillion, Senator Graham suggests taxing the same 12.4 percent on income earned by wealthier people above the $87.900 cap. Which is fair, since they should have been paying into Social Security this whole time.
Otherwise, the money would be raised by. . . borrowing it. Yes, that's right. Although we borrowed more than a trillion so that Bush and the GOP could lower the top tax rate from 39.6 percent to 35 percent, we're going to borrow even more. That is a recipe for financial disaster.
I like this Senator Graham guy.