It's Not FairEditor: Once again, we are asked to swallow a...


December 26, 1990

It's Not Fair

Editor: Once again, we are asked to swallow a bill of goods under the guise of "fairness" relative to the tax reform proposal for Maryland.

The Linowes commission has dealt a real winner. First, property taxes will be reduced. With half of the Baltimore County budget going toward education, the property owner, generally with more children in the public schools than the renter, will be subsidized by the renter. The proposal also states that all renters will be eligible for the circuit breaker. Now, renters must be over age 60 or totally disabled to receive up to a maximum of $600 credit for a portion of the rent considered to be property taxes, but homeowners of any age can receive up to $1,500. Credits are based on family income. Isn't this discriminatory?

In lowering property tax rates, will the law mandate lowering rents proportionately or will the landlord be allowed to pocket this windfall? The renter pays the property tax in the rent -- the landlord merely collects it and remits to the county.

Gasoline taxes, paid by the motoring public, in addition to financing the infrastructure, subsidize public transportation. The law requires only 50 percent of the costs to come from the fare box, which means that bus and metro passengers are riding for half fare.

As to the 2-percent personal property tax on automobiles, by whom and how will the value of a car be determined? A car depreciates every year and values will continue to diminish. How does this affect the auto industry, which has been in the doldrums for many years? Won't cars be kept longer which will impact on the titling tax and personal property tax?

We can only hope that our legislators will see that this scheme is neither logical nor "fair" and will label it "D.O.A."

Sam Jacobson.


Foreign Investors

Editor: Jonathan Paul Yates, writing on foreign ownership of U.S. property, may be an expert on foreign trade, but he comes up a little bit backward on his analysis of the financial effect of such ownership.

He claims that the $663-billion excess of foreign ownership makes the U.S. the world's most indebted nation. Quite the contrary: They have paid the money to us. This money we have in exchange for our property we may do with as we wish; we may invest it, or spend it on Japanese cars and VCRs. It is this choice, not the sale of our property to Japanese or other foreign nationals, which makes us debtors.

Of course, U.S. government policy has played a big role in these decisions. Under the guise of "fairness," our laws penalize investment with confiscatory capital-gains taxes, and then inflate and devalue our dollars in such a way as to further discourage investment -- and encourage foreign purchase of our assets.

Almost every other capitalist nation in the world does not submit capital gains to taxation, or, if it does, it allows an adjustment for inflation. If we want to discourage foreign investment here, we should change our policy to provide incentives for our own citizens to make and maintain these investments, instead of incentives to spend and consume, which our current tax laws do. Rather, we see hands being wrung and more useless legislation proposed.

Franklin W. Littleton.


Unleaded Facts

Editor: This is in response to William Fromm's Nov. 23 letter regarding unleaded gasoline. It contains some significant errors TTC which should not be left to stand uncorrected.

Mr. Fromm accuses "big oil" of duping the public about the price of unleaded gasoline. Eliminating lead, he says, should have resulted in "pure" gasoline at a lower retail price.

Lead, actually tetraethyl lead, had been added to gasoline to improve octane for many years. It is true that oil companies resisted the government order to eliminate lead, but not for the reasons stated and implied in Mr. Fromm's letter. The problem was that at the time that the order was proposed, there was no known substitute for improving octane.

Eventually, and at considerable cost, various substitutes were developed. The problem, however, is that it is more difficult to obtain the same octane ratings with the substitutes as with lead. To make the same quantity of gasoline of a particular octane requires more crude oil if the substitutes are used than if lead were used. The increase in the cost of unleaded gasoline resulted from the increased crude oil needs, the increased cost of lead substitutes and changes in refining technology.

Making gasoline is not as simple as making Jello; the oil companies are spending huge sums making gasoline that is acceptable commercially, environmentally and socially. There may be some valid criticisms of the oil industry, but critics should get their facts straight first.

William A. Heidecker.



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