Snow Rules Out Increase In Social Security Tax

by Leroy Baker, Tax-News.com, New York

22 February 2005

Speaking to an audience of Wall Street executives on Friday, US Treasury Secretary John Snow ruled out the possibility of an increase in the rate of payroll tax to fund the social security system, although he indicated that the Bush administration is open to an increase in the level of income subject to the tax.

"We will not raise the payroll tax,” Snow told reporters in New York, where he was addressing a symposium on social security reform attended by business leaders.

"Beyond that, everything is on the table," he added.

According to Snow, demographic change means that the US social security system will begin paying out more than it takes in tax revenues by 2018, as retirees begin to comprise a larger proportion of the population.

“Some of the most compelling conversations I've had this week, with some great financial minds here in New York, were about the irrefutable facts, the undeniable fact that the Social Security system is on an unsustainable path,” he observed.

“Social Security has been patched up in the past. We've raised taxes to take us through a few more generations of retirees. But the patches don't last because our demographics are working increasingly against us. We need lasting, meaningful reform,” he added.

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