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Tax Capital Gains On A Sliding Scale


Readers Report

TAX CAPITAL GAINS ON A SLIDING SCALE

'How America can get the 'patient' capital it needs" (The Corporation, Oct. 21), gets to the heart of the problem but avoids the obvious answer: a capital-gains-tax change.

With the possible exception of the trouble caused by the U. S. having more than 750,000 lawyers, a lack of long-term capital-gain incentives is industry's most serious problem. It seems so simple to tax capital gains on a holding-period sliding scale, from 100% during the first year to 0% after X years. (I have no strong opinion on what X should be, but five years seems about right.)

I think that, with this change, U. S. corporations would adopt longer-range strategies, an absolute necessity for competing with the Japanese.

Alan F. Shugart

President & CEO

Seagate Technology

Scotts Valley, Calif.


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