President Refuses to Rule Out Payroll Tax Hike
Under the current system, payroll taxes are paid only on the first $90,000 in wages. The president has repeatedly said he opposes raising taxes, but his advisers have been intentionally vague about whether he also would rule out subjecting a greater share of pay to the existing tax, reported the Associated Press.
When asked directly, Mr. Bush said he would not rule out raising the cap, though he does not want to see the payroll tax go up, according to the AP. The rate is now 12.4 percent, split between employees and employers.
“The one thing I’m not open-minded about is raising the payroll tax rate. And all the other issues go on the table,” the president told reporters, according to the New Haven Register in Connecticut.
The story was published as President Bush returned to the road Wednesday to promote his plans for Social Security reform, making a stop in Portsmouth, N.H.
There, he touted an “ownership society,” the philosophy behind allowing workers under age 55 to divert some of their Social Security contributions to personal investment accounts.
“Investors aren’t just Wall Street people, as far as I’m concerned,” he told the crowd. “I think every citizen, every citizen has got the capacity to manage his or her own money — and if they don’t, we’ll help them understand how to and the rules will be such that they can.”
Federal Reserve Chairman Alan Greenspan, meanwhile, testified before the Senate Banking Committee on Wednesday, saying while he embraces the idea of personal accounts, the undertaking should be slow in order to keep financial markets stable.
“If you are going to move to private accounts, which I approve of, you have to do it in a cautious, gradual way,” he said, the AP reported.
Greenspan also repeated his calls to Congress to shore up the massive entitlement programs of Social Security and Medicare. Those programs face financial strains as baby boomers begin to retire in 2008.