Capital gains tax makes billionaires

The most tax evasive law in the United States is the capital gains tax. It is the primary cause of the trillion-dollar budget deficit, the disparity between the rich and the poor, and a major factor in low corporate dividends.

It started when greedy corporate officers wanted more than a million-dollar salary and decided it would look better to issue themselves stock. Now it has become the common practice to issue stock disguised as incentives, bonuses and retirement, which decreases the value of the stock and makes them millionaires.

Just one example: They issue the CEO 400,000 shares as an incentive, bonus etc. He holds it one year, sells it for $40 a share ($16 million), becomes an instant millionaire and pays capital gains tax at the 15 percent rate. This is an example of one corporate officer. There are usually at least 10 corporate officers and thousands of corporations in the U.S.

This capital gains tax loophole and free-trade laws are the major cause of our lack of revenue and budget deficit in the country. It is imperative that this law be revoked immediately or changed to allow the 15 percent rate only after the item has been held for 15 years.

The United States is on the brink of disaster. We need to increase revenue, and the other solution is to place a tariff on imports, enough to replace the tax being evaded by foreign manufacturers. Priority should be given to computers and electronics.

JACK H. KNOWLAN SR., Jackson