More on the capital-gains tax

Regarding the Opinion page article "Truth About Tax Cuts," Dec. 30: The author's comment that President George Bush's proposed capital-gains tax cut would "give most of the relief to the people who make their gains by trading, not by investing in new enterprises," is particularly interesting.

The comment reminds me of a professor who stumped our accounting class with the question: "Why are capital-gains taxes lower than regular income taxes?"

The professor shot holes in all the stock answers such as encourages investment, creates jobs, etc. One student finally came up with the reason, the only reason, why capital gains might be taxed lower than regular income tax: The people investing money are the people with money, and this gives them the economic and political clout necessary to see to it that when the laws are passed they will favor people with money.

Rather than encouraging new products and services by manipulating capital-gains taxes, I would like to see innovative and enterprising entrepreneurs encouraged by investment tax credits. Georgiana Hall, Rabun Gap, Ga.

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