From: bud@mtek.com (Bud Hovell)
Newsgroups: pnw.general
Subject: Re: Tax the rich!
Date: 8 Jan 93 18:51:15 GMT
Article-I.D.: mtek.1993Jan8.185115.20618
Reply-To: bud@mtek.com
Distribution: pnw
Organization: MTEK International, Inc.

jamesd@techbook.com (James Deibele) writes:

>A lot of this wealth is purposely undervalued to avoid higher taxes on 
>it.  It's similar to Tektronix carrying a big chunk of Beaverton on their
>corporate books at 20-year-old values, which is what I've heard they've 
>done.  Might explain some of the interest in Tek --- close it down and 
>turn it into a condo park.  :-)

I think you would find that "book value" of any property (real or other)
must, by tax law, be carried based on its original acquisition cost. This
is not usually a good thing for businesses, since older assets, as you
mention, tend to be badly undervalued. The business *looses* the difference
of asset value between book and actual when making its balance sheet. This
is hardly a benefit to the business, since it may diminish both equity and
non-equity funding available to operate.

Because property taxes are paid on real property based on current valuation
(not on company book value), it is difficult to understand how you think
this results in a tax benefit of any kind. When the property is finally
sold, any capital gain (sales price less costs and basis value) is cur-
rently taxed as ordinary income -- like your paycheck. It is difficult to
imagine how you see this as a tax benefit.

Or are you just engaging in poetry? :-)

>to have a place at the table.  Prosperity looked inevitable.  We would
>have the "Great Society".

The only 60s people who really believed this were those smoking some-
thing weird, especially those legislating. There are many of us who
felt -- then and now -- that the 60's were a disaster leavened only by
some basic progress in civil rights.

Prosperity looked inevitable only to those limiting their gaze to only
then-recent past history.

When reality came to call -- in the 70's and thereafter -- there were few
surprises: Mr. Johnson should be marked down as one of the greatest crim-
inal minds of the current century, and we should not forget that he won
in a popular landslide, proving that the American people -- then as now --
will never abandon an underlying belief that The Big Rock Candy Mountain
is their just inheritance, and it is the duty of "gummint" leaders to 
deliver it, regardless of hazard to or neglect of the society at large.

>In the '70s and '80s, the economy slowed down and people started looking
>out for themselves first and foremost.  We're seeing the results of
>this selfishness in our streets and schools now, and nobody can be certain
>that the future will work out as we hope. [deleted]

There is a difference between "selfishness" and "self-interest". These
are easily confused by people who wish to believe that taxpayers should
gratefully fall into line for transfer of half their earnings to others
via the various and several taxes levied by various and several govern-
ments. Usually for purposes showing little measurable benefit to ordinary
citizen.

>To bring rambling back to the subject at hand: I'd argue that the two 
>kinds of rich are self-made and inherited.  While Sam Walton was
>entitled to everything he made, the billions his children received would
>pay for an awful lot of Head Start classes, classes that might keep

And I'm sure you have an idea to remedy this outrageous injustice. But
from just what source do you feel arises a "divine right of the non-
rich"? Or is this just more socialist poetry?

>children in school and out of prison.  At some point, I hope that the

Staying out of prison is a function of gaining the skills to hold a
real job. It is doubtful this is even possible in many public schools
for neighborhoods suffering high crime rates. Head Start will *not*
fix those schools. Nor will massive infusions of cash. The problem is
lack of measurement by and committment to defined standards, not lack
of funds (a fact easily demonstrated by comparison of per-pupil edu-
cation costs in this country vs. all other world competitors who now
routinely beat our shorts off).

You may wish to examine how taxpayers may feel about pissing down
the gutter a major and continuing volume of wealth to support a
slovenly, failing public education system, which is immune to any
real reform and whose solitary beneficiaries are its countless
employees.

>"divine right of the rich" goes the way of the "divine right of kings".

With any luck, the "divine right of those who breath the air" will bite
the dust first: a trend that is now well underway in most of the world,
except in those few remaining corners where ancient hippies and their
New Age inheritors continue to chant in mind-bound unison, substituting
blind, eternal hope in lieu of manifestly obvious fact.
-- 
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