SPEED UP BUSH'S TAX-CUT PROPOSALS

Phony number: The White House and Congressional Republicans should stop giving tax-cut opponents unnecessary ammunition by agreeing that the president's proposal would cost $1.6 trillion over 10 years. The number assumes that tax reductions do nothing to stimulate the economy and that increased incentives mean not a penny more in government revenue. The idea is preposterous, similar to a retailer's believing that reducing prices doesn't help move merchandise.

Every across-the-board reduction in federal income tax rates has boosted government receipts. Ronald Reagan, for instance, slashed income tax rates 25 percent from top to bottom. When fully phased in by 1983, this cut enormously stimulated economic activity. Personal income-tax revenue soared more than 60 percent over the next seven years.

Critics carp that the national debt rose in the 1980s. Spending did indeed grow faster than tax receipts, thanks to Reagan's defense buildup -- which won the 40-year Cold War -- and Congress' chronic inability to resist spending temptations. Even so, Reagan's tax cuts were enormously beneficial. The nation created $11 of new wealth for each additional dollar of national debt. There is not a sensible CEO alive who would not leap at that kind of tradeoff.

Another thing about that number: Even if it were real, $1.6 trillion, which is a cumulative 10-year number, is peanuts compared with the $120 trillion or so of goods and services we'll be producing over the same period.

Make the win real: The Bush administration will likely win passage of its tax cut before Labor Day. This political victory could be short-lived, however. The White House, having gotten its tax bill, will soon thereafter be on the receiving end of voter wrath over the slowing economy. In short, the administration's current proposal is too watered down and too slowly phased in to end the recession and lay the foundation for a strong, rapid recovery. Only a tiny part of the White House proposal, all of $5.6 billion, will be made retroactive to January of this year. Not until 2006 will the reductions become fully effective. You can hear the Democrats' cry now: "The rich got a tax cut, and the American people got a recession."

At the least, all of the tax-rate reductions should become effective this year. Other tax incentives should be added. The most powerful, of course, would be to slash the capital-gains levy to 15 percent or 10 percent. Government revenue would shoot up, as would the financial markets and lagging capital investment. Job-creating risk taking would be revived. No other single measure would have the immediate and long-term wallop of this one.

Other helpful measures would include eliminating those deduction phaseouts as people earn more (which push middle-income earners into effectively higher tax brackets than the statutory ones), liberalizing Roth IRAs, eliminating the 3 percent Spanish-American War federal telephone tax, eliminating or seriously alleviating the alternative minimum tax and extending the Internet tax moratorium that expires in October.

Another helpful capital creator -- and fabulous winner -- would allow America's 44 million mutual-fund shareholders to defer capital gains taxes until they actually sell their shares. Every year fund holders get those dreaded 1099s informing them of capital gains generated by their fund portfolios, for which they are liable. Thus, a fund can be down in value and the shareholders still owe a tax.

These measures, made retroactive to Jan. 1, would rapidly put the economy on a powerful growth track again, just as Reagan's much-criticized reductions did in the 1980s. -- Steve Forbes

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The DRURY INNS were listed last week as the 63rd largest privately held company in St. Louis (which is only a portion of the many investments the Drurys hold around the country).

The St. Louis Business Journal of March 23-29 wrote:

With an estimated $200 million in revenue last year, Drury Inns Inc. is doing better than the industry average despite overbuilding in some markets, said Chuck Drury, who is president and chief executive of the family-owned company.

Last year, the company opened its Drury Plaza Hotel in the historic Fur Exchange Building complex downtown.

The company also is working on its second project in Birmingham, Ala., plans to open second hotels in Memphis and Nashville, Tenn., and is entering the Louisville, Ky., market for the first time.

"We have another dozen or so on the drawing board scattered about," Drury said.

His father, Charles Drury Sr., heads Drury Development Corp., which develops properties for Drury Inns.

The development company is considering renovating another downtown landmark, the Merchant's Laclede Building, into a hotel.

The Drury family has been in the hotel business for more than a quarter-century, opening the first Drury Inn in 1973 in Sikeston, Mo.

By the end of the year, the company will have 13,500 rooms in 102 hotels in 15 states.

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This week DAVID LIMBAUGH'S book "ABSOLUTE POWER" has moved up to No. 2 on the New York Times best-seller list.

One of the book's reviewers commented, "With disarming dispassion, Absolute Power' provides a textbook analysis of how not to run the Department of Justice."

I agree. This heavily footnoted book is a good read for liberal, conservative, Republican, Democrat or others on recent events that we thought we knew about from media reports and discussions.

This is not a tirade about the Clinton administration ... but rather a well-researched, informative exploration of actions and inactions of our Justice Department during the last eight years.

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The unprecedented business push for education reform will pay off.

A drastic overhaul of federal education programs is on the horizon, offering states more freedom with federal funds but insisting on progress.

Tomorrow's work force is at stake. One in three applicants falls short on skills. By 2008, jobs needing training beyond high school will increase nearly twice as fast as those requiring less preparation.

New emphasis on math and science.

And help for teachers. Congress will OK more funds for hiring, mentoring, retraining them. Half now quit their jobs after five years. == Newsletter

Gary Rust is the chairman of Rust Communications.