Readers Report
Making the Tax Cut Efficient and Fair
The most effective way to reduce taxes fairly for the American working person and to stimulate the economy quickly is a simple quarterly cash rebate of the 7.65% payroll tax, up to $325 per quarter (or $1,300 per year) to every working person ("Selling the tax cut," Cover Story, Feb. 5).
By July, the Treasury Dept. could start mailing checks to each of 150 million persons based on the payroll taxes actually paid. The cost would be less than $200 billion from general revenues, and far less than the Administration's proposals. The simple legislation could be summarized on one page. Treasury would bear the burden of implementation, without any additional employer or taxpayer paperwork.
Richard L. Berman
Rockville, Md.
Reductions in tax rates proposed by President George W. Bush are not designed to be just a short-term stimulus for a weakening economy. By reducing the income-tax rate across the board and by repairing some specific segments of the tax code (estate taxes, marriage penalty, etc.), a tax structure will be created that more efficiently reflects the structure of today's U.S. economy.
A dynamic economic environment does not mean there will be a reduction in tax receipts at any level of government. Rather, a more efficiently operating economy will employ more workers in better-paying jobs attributed to continued gains in productivity. In the words of Thomas Paine, "now is the time" for tax adjustments to become a high priority of the new Congress.
Robert A. Isaak
James S. Gould
Raymond H. Lopez
Pace University
Lubin School of Business
New York
The Dot-Calm before the Layoff Storm?
"A dot-calm falls over the office" (Working Life, Jan. 29) portrayed employees as greeting the slowing economy and decreasing work hours with relief. However, not all former 80-hour-a-week employees feel that way--and many of their employers would definitely disagree with you.
As the publisher of a Web site for entrepreneurs, I've received numerous e-mails recently from entrepreneurs and employees worried, not elated, about the slowdown. They recognize that the next step will be layoffs. And that's not a cause for relief for anyone.
Joanne Eglash
Scotts Valley, Calif.
From FASB, an Extra Bonus
"A goodwill gesture from FASB" (News: Analysis & Commentary, Feb. 5) did not mention an added tax benefit of goodwill amortization when goodwill arises from the purchase of another company's stock. The goodwill amortization from these deals typically hits the bottom line in full, since goodwill is an item that is never tax-deductible. The Financial Accounting Standards Board's proposed elimination of this charge will also lower the effective tax rate for these corporations--truly an added goodwill gesture!
James B. Foreman
CPA
New York
Can Anyone Fix the Litigation Machine?
I own a small business, and I do not agree with the conclusions of "The litigation machine" (Cover Story, Jan. 29). The large corporations own Washington--especially now--and individuals are harmed because we do not have a level playing field. As ugly as the situation is, litigation attorneys are becoming our first and last line of defense. And now they seem to be operating in the same manner as the large corporations. So what's the hypocritical gripe?
Bill Berke
Orange, Calif.
The effects of "assembly-line litigation" reveal a disturbing truth about our modern legal system: Personal-injury lawyers have created a sophisticated machine to generate huge legal fees for themselves, while providing little or no benefit for their clients. In fact, their victories come at a deep cost to the little guys they claim to represent. Commonsense reforms are needed to restore fairness to our legal system, ensuring that every legitimate lawsuit serves the interests of the plaintiffs, not the lawyers.
Phillip D. Bissett
Chairman
Maryland Citizens Against
Lawsuit Abuse
Annapolis, Md.
Soy Protein Is a Healthy Food, Too
I was happy to discuss the health effects of soy with the author of "The dark side of soy" (BusinessWeek Lifestyle, Dec. 14). While the writer portrayed my enthusiasm for soy foods to be limited solely to consumption of whole soy food, the existing scientific evidence suggests that soy protein is a healthy food.
My largest concern is to caution people from ingesting high quantities of isoflavones extracts or pills. It is inappropriate to lump isoflavones supplements with soy protein. Doing so may cause unwarranted apprehension among people currently consuming soy protein in their diets and may deter countless others from considering soy as a healthy dietary change.
Gregory L. Burke
Professor and Chairman
Public Health Sciences Dept.
School of Medicine
Wake Forest University
Winston-Salem, N.C.
California's Energy Users Deserve More Credit
"California's utilities doth protest too much" (News: Analysis and Commentary, Jan. 15) brought out in splendid detail the reality behind California utilities' claim of looming financial disaster. Under deregulation, they were allowed rates in excess of their power costs, to pay down their alleged stranded costs. The subsequent story, "California: All sides must take a hit" (News: Analysis & Commentary, Feb. 5), notes that residential customers got a 10% cut when deregulation started. But they also got a $5 billion bond issue, which ratepayers will pay off over many years while the utilities got the money up front and used it for stock buybacks, dividends, and purchases of out-of-state power plants. In the decade prior to deregulation, California consumers used substantially less electricity (per capita) than the U.S. average, and we were paying nearly 50% more per kilowatt.
Ralph Colby
Cool, Calif.
Editor's note: Although the utilities called these bonds "rate reduction bonds," the money involved is separate. If consumers did not have to pay debt service on the bonds, their rate cut might have been greater.
Education Reform: Take the Chance
"A golden chance to fix the schools" (Editorials, Feb. 5) expresses high hopes for bipartisan cooperation on national education reform. But good feelings cannot resolve hard issues.
You suggest more federal money should be spent on public schools in poor neighborhoods, even though Administrations from Lyndon Johnson's to Bill Clinton's have targeted more than $100 billion for compensatory aid--with little to show in return. You commendably support charter schools but want President Bush's boldest idea for redirecting aid rather than continuing to subsidize failure--parent-empowering vouchers--taken off the table before negotiations have even begun. And you zing "right-wingers" for balking at federal testing for local schools, even though a left-right coalition killed Clinton's version of national testing.
Robert Holland
Senior Fellow
Lexington Institute
Arlington, Va.
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