Tugging on the US dollar from all directions
I agree with Joseph C. Harsch that quotas on Japanese imports haven't helped US citizens [``Japanese imports,'' March 5], but it rankles me that after promoting a free market in automobiles, he recommends, with others, that Paul Volcker ``bring down the level of the dollar.'' Every market manipulation is a quick, ``cheap'' fix, whether it be import quotas or adjustments by the Federal Reserve bank. Mr. Volcker realizes this. What is a nation or a business that is barely surviving on borrowed money costing 10 percent going to do when the money starts costing 20 percent? Won't higher interest rates result if the dollar's current strength begins to decline and both US and foreign investment capital flow out of the country?
We need to make a fundamental change in our economic system. Now, while the budget and trade deficits are premier in the mind of Congress, seems like the ideal opportunity. Let's phase out the laws and policies of this country which encourage borrowing and being in debt and [which] discourage saving and investing. Fred Howe Newmarket, N.H.
I was struck by the stark contrast between the article of March 13 ``Rising education, confidence, income herald `new America' -- and new politics'' and that appearing the following day, ``Chicago's homeless reflect national trend -- Hearings bolster recent reports of worsening hunger crisis in US.'' It would seem that we have here two sides of the US coin.
For some time I have been unable to reconcile the figures which indicate that income is on the rise in the US and the increasing number of reports of workers accepting lower benefits.
It is a puzzlement to me that we are feeling so good about our economy when it would appear that our basic industries are leaving the US, taking with them both jobs and capital. I realize that it has been said repeatedly that we are fast becoming a ``service'' economy -- but can we really sustain a healthy economy without industry?
I think it is time to stop cheering quite so much and start tackling some very serious basic problems: The apparent increasing gap between rich and poor, the lack of housing for low and moderate income groups, the outlandish deficit which is hanging over us like a sword of Damocles, and the compounding of our trade deficit, to name but a few of the most glaring examples. Pauline Valmore Indianapolis
In ``Let's Not Change the Charitable Deduction!'' [March 8], Senator Kasten writes, ``We must maintain and protect incentives for giving'' -- and he thinks the way to provide such an incentive is to allow the deduction of charitable gifts from taxable income.
In our present income-tax system, deductions for charitable giving are of no value to those people whose adjusted gross incomes are less than the total of their exemptions plus the zero bracket of taxable income ($3,300 for the average single person; $7,400 for the average couple with two children). My analysis of the 1982 statistics of income (IRS latest) indicates that at least a fifth of all 1982 taxpayers could not have benefited from the deduction for a charitable contribution.
Furthermore, under the present income-tax system, the subsidy provided to others is now scaled from 11 percent to 50 percent in approximate proportion to the range of their top tax brackets. Even if the Kemp/Kasten bill for simplifying the income tax were adopted, there would be no incentive for a working family of four whose income is less than $14,125 because such a family would be exempt from tax. (Kasten News of 30 January 85).
If contributions to public institutions are to be subsidized by the government, the subsidy should be the same for everyone. It could be as much as 20 percent for each contribution without altering the present revenue generated by the income tax. It could be paid to taxpayers as a credit against their tax liability. It could be paid to all others directly -- as the earned income credit is now paid to persons who owe no tax.
All deductions in a progressive income-tax system discriminate against low-income taxpayers. Also the resulting loss of revenue by the government must be offset by the taxes paid by everyone -- or by borrowing if there is a budget deficit! Lt. Col. John A. Mathews, USAF retired (Member of Federal Taxation and Finance Committee of the National Tax Association) Silver Spring, Md.
The bus fare from Portland, Maine, to Boston (a 100-mile journey) is now $18 -- an increase of 50 percent over the 1983 fare. In Britain last year, I made the 400-mile trip from Edinburgh to London for $18. Unlike US buses, British buses left on time, and refreshments, a movie, and radio were provided for passengers. Evidently, [some US firms are] more intent on padding the pocketbooks of their executives than on providing reasonably priced, reliable, and comfortable transportation for their customers. Emily Mavrinac Cambridge, Mass.
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