On cutting the capital-gains tax

The editorial "Tax-Cut Politics" Oct. 29, is halfway on target. Sen. Lloyd Bentsen's proposed tax cut plan does indeed smell like a political ploy. A cynic would argue that it is designed to buy enough middle-class votes to elect a Democratic president in 1992 - one who would then promptly raise taxes.The proposal to cut the capital-gains tax, however, cannot be dismissed in a similar fashion. Any truly equitable tax system taxes capital gains at a lower effective rate than wage and salary income (as in other major industrial countries). There are two reasons for this. Unlike wage and salary income, capital-gains income includes an inflationary component. Also, an investor who earns capital gains faces a prospect of a loss on his investment. Taxing capital gains at a lower rate offsets the effects of inflation and risk on capital-gains income and is a necessary part of an equitable tax system. Therefore, regardless of what the short-term gains would be, we should cut the tax rate on capital gains. Mark Wylie, Los Angeles

Letters are welcome. Only a selection can be published, subject to condensation, and none acknowledged. Please address them to "Readers Write," One Norway St., Boston, MA 02115.

We want to hear, did we miss an angle we should have covered? Should we come back to this topic? Or just give us a rating for this story. We want to hear from you.