THE VIRGINIAN-PILOT
Copyright (c) 1996, Landmark Communications, Inc.
DATE: Sunday, June 9, 1996 TAG: 9606070018
SECTION: COMMENTARY PAGE: J4 EDITION: FINAL
TYPE: Letter
LENGTH: 30 lines
Proposals for a flat tax have my qualified support. I use the term ``qualified'' because there is, in my opinion, a built-in prejudice in favor of the rich (in my terms, those who live off dividends, interest and capital gains).
By whatever means they acquired the principal from which such gains derive, the income from their endeavors is certainly as taxable as the wages, salaries and pensions that the less-fortunate receive (and the pension-taxable income should be only that portion that was not taxed initially).
``Double-dipping,'' as I understand the use in discussion of the flat tax, is predicated on the premise that capital gains, dividends and interest should not be taxed because the principal was taxed when first acquired. The flaw in that premise is that the tax is applied to only that portion represented by the capital gain, dividend or interest (the principal is not taxed again).
If I go out and dig ditches and receive wages, I pay tax on the wages. If one uses his money (no matter how acquired - saved or inherited) to dig a ditch, the return is gain (income) and should be taxed.
On taxing inheritance, it should be done only if the estate from which it came were not taxed on the amount. The government should not be guilty of ``double-dipping''!
C. JOHN ALLEY
Norfolk, May 10, 1996 by CNB