Sunday, September 23, 2007

Obama Launches a Lead Balloon

Obama is putting out a trial balloon on raising the cap for payroll taxes. Currently only the first $97k of income is subject to payroll taxes. The cap is indexed for inflation. Now it is certainly true that Social Security needs either more cash, fewer obligations, or a mixture of both. My objection with raising the cap on payroll taxes right now is that this would provide Congress with an additional $1 trillion over ten years to piss away. If past is prologue, Congress will take the additional revenues and use it to plug gaps in the general budget. The net result will be that people will be taxed at a higher level ostensibly to shore up social security without the intended end being satisfied. This is the virtue of personal accounts, it keeps the money out of congress's hands.

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