Cutting Taxes, Increasing Debt

The tax reform proposals being considered may have a surprising consequence. They all involve a substantial cut in personal taxation, paid for by an increase in taxes on business.

Personal taxes are progressive--the rich pay a larger proportion of their incomes than the poor. On the other hand, business taxes are not obviously redistributive--they lead to higher prices and lower wages for everyone, rich and poor alike, or so it seems to me. Thus, the proposed shift toward business taxes would widen the gap between rich and poor, which has already increased disconcertingly in the last few years.

This is not an argument against tax reform. The proposals could easily be modified to overcome this objection, by shifting back to personal taxes, or by making the income tax more progressive.

MICHAEL KOVARI

Pasadena