Link bailout to tax reform

MUCH HAS been said about the connection between the current fiscal crisis and the need for government regulation, but I have not heard much about the connection between the crisis and the need for a more progressive tax structure.

It has been noted that with the proposed Wall Street bailout, we are privatizing the profits while socializing the losses. Who should bear the financial burden? It should not be the poor and middle class. Rather, it should be the wealthy, who benefit again and again from government largess.

Today's disaster should put to rest the hypocritical and self-interested rhetoric of the right that government is unnecessary and that free markets must be unfettered. The wealthy - and the market economy - benefit from government not just as much but more than the rest of us, and they should pay a fair share.

Starting in the 1980s we reduced income tax on the wealthy, while increasing payroll taxes that offset any income tax break for the rest of us. Not coincidentally, income disparities since then have widened dramatically.

The roaring economies of the 1950s and '60s, as well as those of modern-day Europe, have been sustained by significantly higher tax rates on the wealthy. It is a myth that reasonably high tax rates inhibit innovation - what they inhibit is the flow of tax dollars from working families to the already rich and powerful.

So let's bail out Wall Street to rescue the economy, but let's link it to tax reform.

ANTHONY L. SCHLAFF
Brookline