Roanoke Times
                 Copyright (c) 1995, Landmark Communications, Inc.

DATE: TUESDAY, March 24, 1992                   TAG: 9203240428
SECTION: EDITORIAL                    PAGE: A-8   EDITION: METRO 
SOURCE: STEVE MUSSELWHITE
DATELINE:                                 LENGTH: Medium

WHY ECONOMIC INCENTIVES AND FAIRER TAX SYSTEM ARE NEEDED

It's imperative to institute economic measures to stimulate growth, provide jobs and encourage investment. The necessity for these measures was punctuated when the Virginia Employment Commission released January unemployment figures showing that jobless rates in the Roanoke area and statewide are the highest in nine years.

We need a series of economic incentives that will restore basic fairness to our taxing system, and that will restore confidence in America's economy. A capital-gains tax cut is but one portion of that series of incentives I endorse. Other measures are needed to allow any kind of tax reduction to work, and to be paid for. I support a series of measures to stimulate our economy and to provide more jobs.

We must ensure tax fairness.

Due to Ronald Reagan's Tax Reform Act of 1986, America's top income-tax rate is now only 31 percent. This means that a person making $75,000 a year now pays the same tax rate as someone making $250,000 a year, or someone making $10 million a year. Here's what I support to ensure tax fairness:

Provide economic relief for those who feel the recession most - America needs to provide an immediate middle-class tax cut of 10 percent.

Provide tax breaks for the working poor. Allow the working poor to continue working by providing these incentives.

Make the wealthiest Americans pay their fair share. We need to examine readjusting the tax rates for those earning more than $200,000 a year and impose a 10 percent surtax on taxable income on those making more than $1 million per year.

Review the Tax Reform Act of 1986. Index the income-tax rate so that those earning more are responsible for more.

This is a common-sense approach to tax fairness. It provides relief for the people who need it the most - middle Americans and the working poor. It also provides a method of funding, by making the wealthiest Americans pay their fair share. Just as important, it turns back the clock of the Reagan/Bush years that resulted in the current state of our economy.

Stimulate the economy in the short term.

Release appropriated funding on the new federal highway bill to spend the first two years of money in the first year. Estimates are this would create 200,000 new jobs. I got the Commonwealth Transportation Board to adopt a resolution asking the Roadbuilders Association to use these funds to put unemployed Virginians back to work first.

Raise the ceiling on federal home-mortgage loans to cover 95 percent of at least the median housing price to allow middle-class families to buy into the American dream of home ownership.

Reinsert the interest deduction on borrowed funds. This will help restore consumer confidence and will enable the middle class another tax deduction.

Reduce the $1.3 trillion federal budget by 5 percent. Budget cuts, even to a large extent, are working in Virginia's state government - they can work at the federal level.

Examine long-term methods of stimulating the economy.

Arkansas Gov. Bill Clinton's proposal on capital-gains tax cuts makes sense. America needs to reduce this rate for targeted investment. Half the profit from original investment in new or existing American firms should be excluded from capital gains, as long as the investment is held at least five years. Capital-gains tax cuts should be given to people who make long-term investments (such as real estate) that will create jobs in America - not to Wall Street junk-bond traders who profit daily from the stock market.

Enact legislation to make permanent tax credits for research and development.

Reduce federal defense spending by $100 billion more than the Bush administration's current proposal over the next five years.

Ensuring tax fairness and instituting short- and long-term measures to get our economy moving are the only ways out of this recession. As a small businessman and the only candidate who grew up as a middle American, I've felt the effects of America's ailing economy - and I recognize the necessity to act quickly.

Steve Musselwhite is a candidate for Democratic nomination from the Sixth Congressional District.