Lowering Capital Gains Tax

Nothing--not Liz Taylor and Malcolm Forbes’ wretched excesses, not Leona Helmsley’s disgusting defalcations, not Exxon’s putrescent piggishness--infuriates me half as much as the proposal to revive the tax exemption on capital gains.

By what right does a democratic government tax the wages earned by the honest sweat of a citizen’s brow at a higher rate than the speculator’s windfall gain? What is the justification for so gross an inequity?

Abolition of the special treatment for capital gains was one of the few good provisions of the Tax Reform Act of 1986. The main provision--and the main purpose--of that misnamed measure was the drastic reduction in the tax rate on the highest incomes.

Thus was realized the fond old dream of the very rich--abolition of the progressive income tax. In fact, the new tax rates are retrogressive; the incremental rate is 33% for the merely well-off, but only 28% for the really well-heeled. Repeal of the capital gains tax giveaway was a small price to pay for that bonanza. But now the Bush Administration, in conspiracy with congressional wheeler-dealers, is trying to nullify even that small concession to fairness.

But this isn’t just a low-down Republican plot to rob us poor folk. President Bush’s chief congressional collaborator is Democrat Dan Rostenkowski. Rostenkowski has long been one of the top congressional beneficiaries of the largess of groups with a very special interest in tax matters. Small wonder: As chairman of the House Ways and Means Committee, the birth (or death) bed of all tax bills, he has been one of their chief benefactors.

But to return to my earlier question: How do they justify this rip-off? By voodoo economics, of course.

Leona was right. Only the little people pay taxes.

RALPH CHERNOFF

Santa Cruz