RUST COMMENTARY: CAN'T EVEN GIVE MONEY AWAY

Unabomber -- How to give away $1 million: It was a simple plan. David Kaczynski wanted to give the $1 million reward he received for turning in his brother, Unabomber Ted, to the victims and families of his brother's crimes. But he was in for a surprise, courtesy of the tax laws.

First, the reward itself was taxable income. The bill: $215,000. Legal costs ate up another $250,000, leaving about $535,000 to give away. But gifts to individuals aren't considered charitable donations -- and they're subject to gift tax. If Kaczynski had distributed the money directly, taxes would have eaten up another $220,000. So instead he gave the remainder to a tax-exempt charity, the Community Foundation for the Capital Region of Albany, N.Y., which created the Unabomb Survivors' Fund. The fund will make financial awards to victims of violent crimes committed by paranoid schizophrenics. Applicants will have to provide court or medical papers to back up their claims. -- Brian P. Murphy, Money Magazine

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Understanding the issues is important: Quite often, I write of political issues because I believe the decisions made on political fronts impact our lives in so many ways. But I also realize -- with some frustration -- that many people ignore political issues because they either do not understand them or they believe that political issues are beyond their control. That's just a fact of life.

There is a quiet battle being waged in Congress over a proposed 10 percent across-the-board tax cut that is being offered by the Republican Party. Granted, it's not as exciting as talk of Monica or of Hillary running for the Senate. But it's so much more important.

Do you know who pays the taxes that support our federal government? I'll bore you with some statistics, but believe me, they are important statistics. Just read and think. Here goes. Wealthy taxpayers -- those who earn over $100,000 annually -- pay nearly 70 percent of federal taxes. These wage earners pay the federal government the bulk of the funds used to run all federal programs. OK, I accept the argument that they make it, they should pay it. No problem thus far.

On the other side of the financial ledger are the 48 million taxpayers who earn less than $20,000. They are hit with payroll taxes for Social Security and Medicare, but the vast majority of these wage earners pay no federal taxes. And again, they earn less and therefore should pay less. So far, so good.

The remaining federal taxes come out of the pockets of the middle class. Those who make between $20,000 and $100,000 annually pay the remaining portion of the federal tax bite.

So in general terms, those on the lower portion of the economic ladder benefit from the taxes paid by those on the upper portion of the economic ladder. Still so far, so good.

Well along comes a tax-cut proposal by the GOP that would slice all federal taxes by 10 percent across-the-board. The economy is so strong that we can afford the tax reduction and still provide the services. But that is where the agreement ends.

The Democrats want the tax cut to benefit those on the lower levels of income even though those 48 million Americans pay virtually no federal taxes. The Republicans want all taxpayers to receive equal benefits. And therein lies the lesson of politics.

The Democrats want to redistribute the wealth and the Republicans want those who pay the taxes to benefit from a tax cut. Once we take our tax surplus and fully fund Social Security, there still remains a large portion of excess funds. President Clinton and the Democrats want to use those funds to provide more federal programs. The Republicans want those funds to go back into the hands of those who pay the taxes.

You may not like to read about politics, but if you'll take the time to think of the common sense and logic behind the political thinking, you'll more fully understand why these issues are important. The issue is fairness. -- Mike Jensen, Standard-Democrat, Sikeston

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Liability relief for year 2000 computer problems will be blocked by trial lawyers ... proposal to limit damage awards assessed to companies for messing up on year 2000 and to cap attorneys' fees at $1000 an hour.

Money for antimissile defense will pass ... more than Clinton asks. Republicans feel Clinton is slow in reacting to threats from rogue governments.

And more for military pay and benefits, a 4.8 percent pay raise in 2000.

Special prosecutor law won't be renewed when it runs out June 30. It was Clinton who pushed for its revival in '94, after a two-year lapse. -- Newsletter

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Big Brother, Banker: Washington wants your bank to spy on you. Four federal financial regulatory agencies have proposed "know your customer" rules that would force every bank to "determine its customers' source of funds; determine the normal and expected transactions of its customers; monitor account activity for transactions that are inconsistent with those normal and expected transactions; and report any transactions of its customers that are determined to be suspicious." Ostensibly this program would help fight crime. In reality it is a Soviet-style intrusion into your privacy. Who says the era of Big Government is over?

You could be required to give your bank the source of every deposit. If you got a bonus or sold a house and deposited the proceeds, the bank would flag the transaction as out of your normal pattern of banking, and you may have to answer questions from federal authorities. Why, in a free country, would citizens be required to give an explanation to the government every time they broke their banking routine?

Rep. Ron Paul (R-Texas) has introduced legislation to block these regulation, correctly point out that the government should have access to this kind of information only under a search warrant. -- Forbes Magazine

~Gary Rust is president of Rust Communications, which owns the Southeast Missourian and other newspapers.