Tax-Cut Proposals in Washington

Re “Senate OKs Own Tax-Cut Measure,” June 28:

The current efforts by both the Senate and House of Representatives to concoct budget appropriations bills leave me dumbfounded. I still cannot, and will not, believe that we can eliminate the national deficit and afford the sizable tax cuts (which I dearly would love to have) that these plans offer, both at the same time. Yet, a significant majority of the public goes right along with these machinations. If we accept these bills as our solution, I strongly feel that we shall pay a steep and damaging price later down the road.

What is even more bothersome is the fact that these plans incorporate cuts in programs that have served the neediest members of our society. How can we feel justified in accepting considerable reductions in capital gains taxes (and I would benefit in this area) and other such goodies while reducing Medicare and other needed programs to the tune of billions of dollars? I simply cannot see the fairness in these ideas.

ROBERT C. LUTES

Temple City

* In your article you show the federal tax liability under proposed new legislation for a married family with two children and an annual income of $30,000 as being $875. In this typical presentation of the calculation of federal taxes, the “hidden taxes” where Uncle Sam gets the bulk of his money from the middle class are not even discussed. I’m speaking of FICA (made up of the Social Security tax and the Medicare tax) and FUTA (federal unemployment taxes).

In your example, the family earning $30,000 would actually have paid an additional FICA tax to the federal government of $2,295. On top of that, the employer of this wage earner would have paid in a matching amount of $2,295. Although not quite as significant, let’s not forget the federal unemployment taxes the employer would have paid to the IRS, typically $56 a year. So the federal government collected a total of $5,521 on the $30,000 earned, a far cry from the $875.

If you don’t think “hidden taxes” appropriately describes these other taxes, try finding and reducing them when you file your annual form 1040 with the IRS!

JAMES C. FROELICH CPA

Santa Monica

* Both inflation and depression result in lacking the money to buy whatever is available on the market. Poor people are born into a permanent existence of “inflated depression,” and the Republican-Democratic mob on the Hill and the man in the Big House are now going to make it deeper and make the poor more desperate. Be careful that we do not mistake the power of a hungry people.

TED HOOKER

La Puente