THE VIRGINIAN-PILOT
Copyright (c) 1995, Landmark Communications, Inc.
DATE: Friday, December 29, 1995 TAG: 9512280008
SECTION: FRONT PAGE: A10 EDITION: FINAL
TYPE: Letter
LENGTH: Short : 45 lines
Patricia W. McKenna praises supply-side economics in her letter (Dec. 9).
This theory which Ms. McKenna so strongly embraces would decrease taxes significantly on corporations and the wealthy. The result would be that the corporations would make more profits which they would use to expand their industries and increase employment. The wealthy would also have more money to spend and would, by increasing their purchasing power, improve the economy.
Let's look at the facts. (Contra factum non valet illatio.) according to Donald Bartlett and James Steele of the Philadelphia Inquirer in their Pulitzer Prize-winning book America: Who Really Pays the Taxes, corporations today provide 15 percent of the federal government's general-fund tax collections as compared with the 1950s when corporations paid 31 percent. In the 1950s, individuals paid 49 percent of the taxes; today they pay 73 percent.
What are the corporations doing with the increased profits they realize from these tax breaks? Expanding their plants to produce more revenue and create more jobs? Not hardly! They are downsizing and reducing employment in order to operate more efficiently and create more profits as a result of decreased taxation. It is far better to tax corporations so that they are forced to expand in order to produce more revenue, which in turn will produce more profits.
Columnist Molly Ivins reports that the Center and Policy Priorities reported that the wealthiest 1 percent of the population has as much after-tax income as the bottom 49 percent of the population and that the top 20 percent has as much income as the bottom 80 percent. There would have to be a tremendous amount of ``trickling down'' to improve the conditions of the middle class and the poor.
Supply-side economics is a myth conceived by rich corporations and the wealthy in order to protect their comfortable positions. These are the facts: Responsibility is not a part of the economic philosophy of wealthy corporations or wealthy citizens.
E. J. GANLEY
Melfa, Dec. 10, 1995 by CNB