Phillips on Capital Gains Tax Cut Proposals

Apparently, Kevin Phillips, in “The Fat Cat Tax Cut” (Opinion, April 6), is unaware of the IRS data on capital gain or loss items included in tax returns. Facts are that 70% of returns reporting capital gains or losses have gross incomes of less than $100,000 and between 40% and 50% have less than $50,000, like mine.

He must also be unaware that tens of thousands of families must dispose of family heirlooms, homes, farms and small businesses to pay confiscatory estate tax rates. And most, if not all, of the supposed gain on these assets is phantom, caused by inflation, which, for example, amounted to 105% from 1980 to 1996.

We have been striving to index asset values for capital gains tax purposes and to reduce capital gains tax rates for many years, long before the revelation of the astonishing Democratic campaign fund-raising antics, of which The Times has been in the forefront.

STANLEY L. KATTEN

San Pedro

* Phillips boldly roams where angels fear to tread. He tackles the high and mighty.

The Sam Donaldson/George Will school of reporting entertains us with superficial political discussion but never steps on the toes of the wealthy and powerful, from whence the million-dollar yearly salaries flow.

A nation littered with the scalps of politicians and corporations that couldn’t keep their snouts out of pork barrels would be a joy to behold.

MAX ROBINSON

Los Angeles

* I fully agree with Phillips that a capital gains tax cut would be an obscene gift mainly to wealthy people, while hurting many poor people as it forces cutbacks in other programs. The way to make the capital gains tax cut fairer is to limit the exclusion to 50% of the first $50,000, and 25% of the next $50,000. There should be no further exclusion above that, other than the present limit of a 28% tax rate on long-term gains. That way, the loss in revenue would not result in so many other cuts in essential services.

Real estate should be included in my proposed plan and dropped as the separate exclusion the president has suggested. Those who own real estate already get large subsidized breaks with the chance to write off their property taxes and mortgage interest expenses (and a $125,000 exclusion on gains if they are over 55).

We renters pay the property tax and mortgage interest of the landowner with our monthly rents--yet we get no tax break. The average homeowner earns 50% more than the average renter--yet we are asked to subsidize them!

MICHAEL KLEIN

Santa Barbara