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'Big Hype' of Tax Reform

August 06, 1986

The top one-half of 1% of the U.S. population owns 58% of private businesses and 47% of U.S. stocks, according to a staff study by the Joint Economic Committee of Congress. The bottom 90% of Americans own only 28% of the nation's wealth.

What do the top half of 1% do with their money? A minuscule minority are philanthropists, and the corporations they own reflect it. Two-thirds of U.S. corporations give nothing to charity, according to a recent report by the Carnegie Commission. Ninety-five percent give no more than $500 per year.

What are they doing with all this money? Among other things, they buy Learjets, multiple vacation homes--in places like Ibiza, the Azores, or the Hamptons--join country clubs, and lavishly entertain "business" guests. The rest of the profits--after the bills are paid to keep the yacht over in Monaco--go into banks in Beverly Hills or Switzerland.

So why is President Reagan asking Congress to cut taxes for the the richest tax bracket from 50% to 27%?

The tax rewrite is supposed to be revenue-neutral. If taxes to the very rich were cut in half, who do you suppose would have to make up the difference. Who else?

If the President wants to get rid of abusive tax loopholes, then he should lobby Congress to outlaw loopholes. There's no reason to kill graduated taxes. The revenue gathered by closing the loopholes would permit lower tax rates for middle-income and poor taxpayers.

If the new revenue were combined with cuts in the federal money that pays for megadollar airborne coffee pots and corruption in the beleaguered weapons industry, no one would need to worry about the deficit. The President and members of Congress have brains enough to realize this, but they're behaving as if they don't.

Why are they acting this way?


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