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From: notes@iuvax.UUCP
Newsgroups: net.politics
Subject: Re: The idle money of the rich - (nf)
Message-ID: <340@iuvax.UUCP>
Date: Fri, 13-Apr-84 01:03:40 EST
Article-I.D.: iuvax.340
Posted: Fri Apr 13 01:03:40 1984
Date-Received: Sun, 15-Apr-84 07:11:49 EST
Sender: notes@iuvax.UUCP
Organization: Indiana University
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#R:mit-eddi:-159500:iuvax:2000027:000:1681
iuvax!scsg    Apr 12 12:31:00 1984


Certainly there is a great need for savings to provide investments
for our future productivity.  However it is questionable whether
the current tax system really encourages such investments by the
middle class.  Currently the U.S. has a savings rate of only 
approximately 5%.  It may be a good idea to provide tax incentives
for the middle class to save and invest more.  One thing Gary Hart
suggests in his book "A New Democracy" which seems like a very good
idea is to free up Pension funds for investment in more Venture-capital
entrepreneurial enterprises.  As it is now many Pension funds are
almost forced to invest in blue-chip stocks to insure the Funds security
rather than venture capital funding for small startup companies.
Pension funds already control something like $500 billion in assets.
While it may be worthwhile to provide tax incentives for the middle class
and average income groups to save , I think there should be some sort of
cap on the tax deductions allowed for such investment.  Having a tax structure
which grossly favors investments by the rich (as we currently have) promotes
inequity and furthers the even greater wealth inequalities we have in this
country already.  I don't think it's a good idea to give the rich tax
breaks to control even more of the wealth of this country than they do
already.  Wealth is power and in the long run is even more important than
income.  Trying to promote a more rather than less equitable distribution of
wealth seems just as important as promoting a more equitable distribution
of income, though one never sees this issue addressed in the media.
tim sevener
Indiana University, Bloomington
pur-ee!iuvax!scsg