Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: THURSDAY, March 26, 1992 TAG: 9203260422
SECTION: EDITORIAL PAGE: A10 EDITION: METRO
SOURCE:
DATELINE: LENGTH: Medium
OK, throw some out - but can't we think of better reasons for doing it? Here are just two candidates:
In his telling State of the Union message last January, President Bush proposed revising the income-tax laws so big-time developers can wipe out their federal tax liability.
Congress obliged quickly. The House's version would allow a developer to deduct 80 percent of his passive losses on real-estate operations from his other income.
Predictable result: Not only will many developers pay less - or no - taxes. Yet more buildings will be put up not in response to market demand, but as empty monuments to tax-sheltered income. The '80s all over again.
Why would Congress do such a thing, in bipartisan agreement no less? Maybe it has something to do with the $12 million in campaign contributions the real-estate industry has showered on members of Congress, Republican and Democrat, in the past four years.
Of 250 top donors to the Republican Party's "Team 100" - those who give more than $100,000 - 60 are real-estate developers. (Mr. Trump, it's Washington on the phone.)
Is anyone angry over this plundering of the public purse?
Speaking of plundering: Remember the savings-and-loan scandal? Sure, the headlines have receded. But the S&L bailout will cost taxpayers $67 billion this year alone, plus interest on whatever the previous year's payments have added to the national debt. (Total interest payments on the national debt for this year: $200 billion.)
This is money from your pocket that won't be spent on upgrading mediocre schools, restoring crumbling infrastructure, reforming the health-care mess, or improving the shameful lot of America's children, a fourth of whom now live in poverty.
Sorry, we have obligations to meet.
And S&Ls aren't the only institutions requiring handouts. The Office of Management and Budget, without a lot of fanfare, recently estimated this year's cost of bailing out distressed banks. Would you believe $33 billion? So much for estimates, of just a year ago, that less than $10 billion would be needed. (Can you imagine the outcry if the cost of welfare programs rose in a single year by more than 300 percent?)
This debt will, of course, also be financed by government overdraft, a huge rubber check covered by Treasury borrowings and collateralized by the future living standards of our children.
But never mind. People are furious about congressmen drawing against their own earnings in a casually run House cash club. Meantime, our representatives quietly throw millions to big-spending real-estate tycoons and wildly miscalculate the cost of bailing out misregulated financial institutions. It's not only their own checkbooks they're failing to balance.
by CNB