The President’s declaration on payroll taxes was necessitated by Sen. Lindsey Graham (R.-S.C.), a leading proponent of reforming Social Security by allowing individuals to set aside part of their payroll tax in privately owned retirement accounts. Last week Graham said he would be willing to raise the income cap on the payroll tax–it will be $90,000 next year–in order to entice a prominent Democrat into co-sponsoring his Social Security reform plan. Graham’s proposal was helped when it was then favorably reported by columnist Robert Novak, who usually opposes tax increases. President Bush clearly favors privately owned retirement accounts–only, we now know, he wants to create them and pay their transition costs without raising taxes.
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