Novak feels that hard as it would be for Republicans to swallow an upper-income tax increase, harder still would be convincing Democrats to go for the Personal Savings Account idea (as Novak cleverly points out, every American invested in the markets is a Republican in waiting). Of course, Bush has clearly expressed a desire to spend political capital, and this is big domestic issue number one.
My take is this: I'm not going to reject Graham's idea out of hand because it is a tax increase. I don't have the relevant figures in front of me, but what if it was packaged like this:
- Make the first term tax cuts permanent
- Raise the payroll tax income limit to $175,000 (about double the current cap)
- Let Americans set aside 3 percent of their Social Security payments to Private Savings Accounts (1% less than Graham's bill)
- After ten years, drop the 12.4% payroll tax to 11%.
I stress again that those figures are just pulled out of thin air - I'm just talking about an approach to sell this along those lines. I think I could go for such an arrangement - how about you?
UPDATE 12/08/04 12:56 p.m. - Here are some very deep thoughts on the subject from deona, posted at JustOneMinute (hat tip to Dicebucket).