Productivity Bonds

Regarding the call by Assemblyman Wally Knox for a government-run program of “productivity bonds” (“For Americans, Prosperity Rests on Productivity,” Valley Perspective, July 30), I’m happy Knox recognizes that productive investment creates better-paying jobs. I’m disappointed, however, that Knox offers a governmental “solution” to a problem that government has created.

Consider the many ways government policy discourages investment.

High tax rates, approaching 50% on middle-class families, make saving impossible for many.

For those who can save, government strictly limits the amount of money a worker can place in tax-free retirement accounts. Taxation of interest income makes most bank savings accounts unprofitable. Capital gains taxes are not indexed for inflation, and investors are taxed for nonexistent “gains” attributable solely to inflation.

When government penalizes savings and investment, the inevitable result is less saving and investment.

If Americans saved more, their capital would fuel the creation of many more good jobs.

Unfortunately, the Democratic Party strongly opposes tax cuts for middle-class taxpayers, opposes capital gains tax reduction and indexing for inflation, and opposes privatization of Social Security. Thanks to Democratic tax policy, there is less productive investment and fewer good jobs than there would otherwise be.

Perhaps Knox could find a “rejuvenated center” with “substance” and a “soul” within his party.

Government should stop discouraging investment before adding a new, productivity bond bureaucracy.

MICHAEL C. WILSON

Burbank