Tax Incentives to Save and Consume
* Re “Three Things We Need on Taxes: Simplify, Simplify, Simplify,” by Maya MacGuineas, Opinion, Feb. 11: How confused can we get? It seems to me there is a peculiar smell of the failed supply-side economic theory of the Reagan administration. How does one reconcile powerful incentives to save with the lesser ability to consume, i.e., to stimulate the dangerous slowing of the economy, under MacGuineas’ proposed progressive consumption tax?
In addition: If a person saves too much too soon he or she may find that, at retirement, income may be the same or even more with fewer tax deductions, and therefore the person will be in a higher bracket.
SYLVIA S. LAMONT
Gardena
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Ralph Reiland’s Feb. 11 commentary, “The Rich Deserve That Bigger Tax Break,” is yet another completely far-fetched attempt to defend the rich. What Reiland and his ilk don’t seem to understand (or at least don’t want to face) is that the whole point of taxes is to compel citizens to give just to the point where it starts to hurt, so as to alleviate the even greater hurt of others.
Well, there’s no argument that could make anyone believe that those making $1 million a year will in any sense “hurt” when asked to give $44,000 more to the government. That $44,000 may not end up in the hands of those who truly do hurt, but that’s another question. The rich should give until it hurts, just like the poor. If they want to explain to us why not getting a third vacation house is painful, they’re welcome to try.
PAUL McCUDDEN
Los Angeles
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We do agree with President Bush’s tax cut. Senate Minority Leader Tom Daschle is wrong. Any money that goes back to the people, rich or poor, will revitalize our economy. Here we have a president trying his best to reach out to the liberals and most of them just think politics. It’s time to think and act as one nation, as Americans.
PERRY NICE
Canoga Park
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I commend The Times for its Feb. 9 editorial opposing the repeal of the estate tax while granting the need for some modifications. I suggest an additional reason for retaining the estate tax. The estate tax is an encouragement for persons of wealth to establish private foundations and other philanthropic arrangements. In the arts, education, health and scientific research, these diverse individual choices encourage innovation, fill niches inappropriate for government and lend balance to areas in which government predominates.
It is no doubt true that some philanthropy would continue in the absence of the estate tax, but surely in lesser amounts. Under the present law the giver can, in effect, direct to purposes of his choice funds which his estate would otherwise pay in taxes. Nudging the wealthy toward philanthropy is good public policy.
GENE BARMORE
Huntington Beach