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reform an ill sight
When beleaguered taxpayers take a closer look at the
latest federal exercise in tax reform, the situation will
dishearten them.
Although the House Ways, and Means Committee
recently voted for a $1 .5 billion tax cut, the average tax
savings for low and middle income persons will be;
worth less than the cost of two weeks' groceries for a
family of four. The committee has made certain,
however, that the wealthy will be even better cushioned
against economic misfortune.
, The 25-member committee, chaired by Democrat
Wilber Mills of Arkansas, is expected to confirm its tax
r evisions this month and call for a House vote.
The committee proposed to raise the standard tax
deduction to $2,500 or 17 per cent of adjusted gross
income (from the current $2,000 or 15 per cent). The
low income allowance would be raised to $1,400 for
single taxpayers and $1,500 for those who are married.
The allowance currently is $1 ,300, regardless of marital
status.
But these tax breaks don't amount to much. Under
the new rules, a family of four which does not itemize
deductions would save $34 on income of $8,000, $38 on
an income of $10,000 and $110 on an income o? $15,000.
Middle income taxpayers who do itemize their
returns would be victims of the committee's "tax
simplification" plan, which eliminates several itemized
deductions like the state gasoline tax. In their place, a
"miscellaneous" deduction of $350 plus two per cent of
the taxpayer's adjusted gross Income, up to a total of
$650, is proposed. The change would give each of the
-estimated 33 million itemizersan average increased tax
benefit of $8 a year.
For wealthy taxpayers, the committee would ease the
already generous capital gains tax exemption. The new
rules would allow persons who make a prof it on the sale
of securities, real estate and businesses to increase
from 50 per cent to 75 per cent of the amount of gains
exempt from taxation. The increase is worth $1
billion most of which would go to the top one per cent
of taxpayers who get the bulk of capital gains benefits.
Wealthy taxpayers would have yet another benefit
lavished on them. The cornmitteewould reduce the
maximum tax rate on investment income, which
includes dividends, interest and rents income labeled
"unearned."
Currently, persons who make $50,000 or more a year
pay a 70 per cent tax on all their unearned income.
Under the new provision, they would pay 50 per cent on
the amount of their unearned income which is equal to
their earned income (salaries, wages and net
self-employment income).
Under a fair tax system, the rich should pay a greater
share of the nation's tax burden. Other members to
Congress should send this unjust measure back to
Mills' committee with instructions to design a fair
revenue-raising law. The bill needs to strengthen the
nation's sagging economy, but the personal economics
of the wealthiest taxpayers.
Jane Owens
4
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CO
Fasten-ating Subject
Dear Editor, . ' Vj.-
If your Sept. 4 editorial on seat-belt
interlocks, you did such a good job of
knocking down the strav man of Big
Brotherism that you managed not
only to evade the technical drawbacks
of interlocks, but to miss the whole
point of the issue.
Your contention that the wearer of
seat belts could "exercise better
control of hie automobile after a
collision" is redicul.ous, if you know
anything about cars. In a head-on
crash, for instance, the steering gear
is one of the first things to go. No
steering, no control.
Interlocks have several faults. If
you put packages in the front seat,
you must buckle them up. An
interlock is complex, including a lot of
circuitry and a small computer, and if
anything goes wrong with it. you may
not be able to start at ail. The system
requires you to wear shoulder belts at
all times, although they're worthless
at speeds under 45 m.p.h. and can
break your collarbone in a crash.
But none of this is the real point.
This is: All our legislators' .remedies
have been after-the-fact. None can
reduce the $50-billion-a-.ycar tab you
mention, because the only way to cut
j-. Jie, qost.( or accidents is to cut the ,
'.u'oumlaer otaccidents. ,
There is a better way. Instead of a
law requiring people to "buckle up",
how .about minimum standards for
cars' handling and performance?
(When was the last time you heard of
an accident involving, say, a Ferrari
Daytona?) How about more money .
and higher standards for driver
education? How about tougher licens
ing requirements? How about more
effort in detection and rehabilitation
of drunk drivers?
I should mention that I wear seat
belts whenever riding in a car.
Jim Williams
Barking for the trees
Dear Editor,
Re: the Daily Nebraskan. We
would rather have the trees.
Kent Davy
Kyle Davy
Pamela Davy
Usury law
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aru!iaiu,i7-o
rate low
Occasionally an issue will come along on which all of
the facts lead to one obvious and inescapable
conclusion. On such issues it naturally is assumed that
the proper public action will be taken.
Such ought to be the case concerning Nebraska's
archaic usury law. But alas, instead of logical action, we
finri Rome cf our state's leaders preparing for the fall
season of "Political Football" in anticipation of tins BIG
GAME in November.
Our state's usury law and the economic principles
involved are obviously not the political discussion topics
highest on everyone's list of concerns.. Newspaper
reports about it are, more than likely, yawned over.
However, this is one article on the subject that
should be read, because it deals not only with an
economic issue, but also with the disgusting political
opportunism being foisted on the people of Nebraska by
some of their elected of ficials.
Gov. Exon has been joined by a few of our stqte
senators in the perpetration of this fraud on the public.
They have come out solidly and grandly to "hold the
Does this law help anyone? Yes ... It helps people in
other states who want to borrow money. Nebraska
money is flboing to other states in search of higher
, ijids. Does this law hurt anybody? Yes, everyone . . .
Graduates who want to buy a home cannot find loan
money availat'e. The housing industry (contractors,
laborers, mortage bankers, realtors, etc.) currently is
experiencing a forced recession because of the
unrealistic constraints of this law. The entire state will
Gutter eventually, because of the adverse inter related
economic effects this situation will have. on the rest of
our state's economy.
But Gov. Exon and other politicians the people tru-M
continue to oppose any raise in the usury law. Doesn't
the 9 per cent rate moan Nebraskans will pay less
interest for their mortgage money? NO! It moans they
won't pay anything for interest because they won't bo
able to get a mortgage at all.
Perhaps the true economics of the situation will
appear more clearly if compared to a mythical state law
which would require all cattle sold in Nobr,isk,i to hp
lino on inflation" by leaving the state's usury rate at sold for less than 25 cents a pound
mark t;
ngni
urn
nine nor cent. Thev have come out in defense of ihe
"average Joe," who would have to pay tho higher
interest rates if the Legislature leqalied them.
Hip-hip-hoa-ray for the defenders of Mom, ;i;,nlo pte
and the flag! Right? . . .Wrong!
. The rate of interest charged on borrowed moiv:y (now
approaching 13 per cent) is" national and intornatiortril in
scope and origin. The state of Nebraska -cn no ttu.
"control" that economic variable thor. they
"c'.'n?r:ii: the temperature outside.
now song wounJ it taKe Nebraska ranchers tn Innd
thoir cattle up and ship thorn out of the state for sale?
Likewise, tho state's mortgage money has b..-rn
nowhere to earn more than it loyally can earn
ippod f.
ki Nebraska.
So why do somo unscru;H.:oo: politicians conhnuo
fight a etianqo in the law? Are they really sr
A 'ft sighted andor stupid !ney carf't understand thV
; nar: situation? I think not. It is simply oa:,ier to fH
voter:, wh.it they want to hour than ii u. i. u.u ih.
rcj'.d
However, thev can and. hive
economic variable by setting 0 pt'
maximum legal interest rate for most
made in the state
daily net.
tioe
ill i
private
!h
loan:
voter
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,nn
w. jt tn;y ou.'mi to hear .
, SckJ that in the t?ost-Watern.'tn r.niie. Miiv
'limnte we still find ooiiticiarn intent nn
iO tn enhlti, that has put it!; trust in them.
A
page 4
rnonday, September 9, 1974