Mikulski's Tax Message Pleases Chamber Members

Senator Supports Capital-gains Break To Boost Economy

January 15, 1992|By James M. Coram | James M. Coram,Staff writer

A member of the Bush administration could not have warmed the heartsof a largely Republican audience in Columbia yesterday any better than did liberal Democratic Sen. Barbara A. Mikulski.

Mikulski told members of the local Chamber of Commerce she wants to restore a tax break on long-term capital gains -- an avowed goal of President Bush.

The difference between what she wants and what the president wants, Mikulski said, is that she wants to lengthen the time that assets must be held in order to qualify for a tax break.

Past versions oflaws gave investors a tax break on income they received from the sale of assets owned as little as six months.

Mikulski wants "a good-guy bonus" for people who own property five years or longer. "The longer you hold, the less you would pay," she said. "We could have a bipartisan agreement (in Congress) right now if we lowered the rate proportionately."

The proposal was applauded by farm bureau President Martha Clark, who told Mikulski that without a tax break on long-termcapital gains, many farmers find it impossible to transfer land to their children and thus cannot stay in business.

Clark said farmersalso need a break on inheritance taxes and the return of investment tax credits. In most cases, "there is not enough cash flow (to pay the taxes) and keep the farm," she said.

"My idea goes exactly to what you're talking about," Mikulski told Clark. Mikulski said she wants to allow parents to use individual retirement accounts to help children become homeowners. She is also looking into less expensive ways for parents to pass businesses to their children, she said.

Mikulski, who is running for re-election this year, said she wants to restore a research and development tax credit for businesses. That credit would emphasize "more development than research," she said.

"I wasembarrassed when the president went to Japan," she said. "He made uslook like a tin cup economy. To hell with that. We've got to invest in development to compete around the world."

Mikulski suggested that the way to successfully compete would be for the nation to put as much effort into developing business technology as it put into developing military technology.

Despite the end of the Cold War, a quickhalt to defense contracts would be precipitous in a shaky economy, Mikulski said.

"Bleeding hearts will not solve the hemorrhaging of our economy," she said. "We have to be very careful about what we do as we draw down the defense budget."

The nation needs to pick areas in which it can successfully compete on a global scale -- space, biotechnology, pharmaceuticals, she said. "If we found a cure for Alzheimer's or AIDS, think what that would mean in reduced nursing-home bills."

Nancy Smith, vice president for investor relations and public affairs at the Ryland Group Inc., complained that the homebuilder had been competing successfully in Israel -- building homes here with American labor and transporting them there for assembly -- until recently. Israel is now requiring the homes to be built inside the country by Israeli workers, Smith said.

Mikulski said she was aware of the company's problem and was seeking a solution.

Large American companies are not competing with each other as much as they are competing with other countries, Mikulski said.

"People like me want to put strings" on foreign aid, she said. "If we give aid, then they should buy American and let us train their work force."

If you don't think that went over well with Republicans, just ask builder Chip Lundy, president of Williamsburg Homes.

"I just want you to know I voted for Barry Goldwater in 1964, so you'll know where I was coming fromwith some of my questions," he told Mikulski after the meeting. "Thanks for coming."

"It's good that we can talk to each other like this," Mikulski said with a smile.

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