Economic Policy Favors the WealthiestSkip to next paragraph
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The Federal Reserve Board raised interest rates to slow the economy as a preemptive strike against inflation.
But with no sign of increasing inflation, is a slower economy good for the millions of unemployed, more than 5 percent of the work force? This doesn't count those who have given up looking and part-timers who want more work. Is it good for welfare recipients who are supposed to move into jobs? Or for working people who will lose leverage for wage increases?
In trying to justify a cut in the capital gains tax, there is only talk about the need for growth. Since most economic gains over the last 20 years have benefited the wealthiest, wouldn't it be more equitable to slow the economy by raising taxes on this group?
Raising rates to reduce inflation is inherently inflationary: The cost of borrowing is increased for consumers and businesses, which pass on increases to customers.
As usual, economic policy is tailored to the well-to-do - not surprising since they make the big contributions to elect politicians.
Western Springs, Ill.
Defense of the IRS
With the editorial "Stirrings at the IRS" (March 25) the assault on government has now gained credence with the Monitor. The IRS, with all its faults, is made up of mostly talented, hard-working Americans. Next to many private (and huge) corporations, the IRS is more diligent, honorable, and efficient.
The proposals of Rep. Bill Archer (R) of Texas to abolish the income tax are not serious and he knows it. His personal tax deductions would go out the window.
Get real, guys. These assaults on government and on taxes are political spins to gain a more lucrative toehold on tax revenues by Mr. Archer and the like.
When income taxes are applied without all the deductions for the wealthy, it is the fairest way because it taxes the ability to pay.
And where would 100,000 ex-IRS employees get jobs? Aren't there hardly enough jobs now? Especially for the untrained, the aging, blacks, native Americans, etc.
Look at taxation through other eyes than those of the radicals.
Colleges need to obey market rules
The author of the opinion-page article "Easing Families' Tuition Shock" (March 25) would have us believe colleges don't operate like businesses, that they somehow don't obey economic laws that govern other enterprises. It is no coincidence that education and health care, the most heavily subsidized sectors of the economy, are precisely where costs have gone up most over the past several decades. They are also the two sectors crying loudest for more subsidies.
If you strip the author's argument bare, you get this: My employer can't offer its services at a price the market will accept, so I think the government should step in to make up the difference. This is outrageous.
Eric J. Klieber
Cleveland Heights, Ohio
Vice taxes adequately cover ills
The author of the opinion essay "Uncle Sam Should Ask the Tobacco Industry to Pay Up" (March 26) says the industry should pay for illnesses caused by smoking. In the editorial "Ending a Smoke Screen" (March 24) you say distilleries should pay for ills brought about by drinking.
When I last read an economist on this, it seemed tobacco taxes were more than sufficient to pay all related illness costs and to compensate the country for lost years of life at rates usually accepted. I imagine the same is true of liquor taxes, since they are high, too. Even if that's mistaken, we allow the industries to sell at the old tax rates; surely you don't want an ex post facto tax, do you?
If companies are engaged in crime or fraud, they can be punished. That's what the current lawsuits are about, not simply about seeking compensation for social costs.
John T. Wilcox
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