Letters

Antiwaste Inspiration

Enclosed is a copy of a bill I introduced regarding military waste. The initiative for this legislation was inspired by an article in your magazine by Dina Rasor ("Fighting with Failures," Apr.).

Keep up the good work. We are very interested in many of the fine ideas in REASON magazine.

Robert Garcia
Member of Congress

Bursting the Bubble

"Panic to the People" in the May issue describes a number of situations where the federal government created unnecessary fear in large numbers of people by acting precipitously on the basis of poor, insufficient, or inaccurate information. One of the most fear-inspiring situations was omitted from that article, namely, the Nuclear Regulatory Commission's "creation" of an explosive hydrogen bubble in the Three Mile Island (TMI) nuclear power plant accident in 1978.

The NRC told news reporters that a bubble of hydrogen gas had formed inside the pressure vessel of the damaged TMI reactor and that, if the bubble exploded, it could fracture the vessel and release massive amounts of radioactive material to the surrounding countryside. Several scientists and engineers quickly demonstrated to the NRC staff that there never was and never could have been any explosive potential from that bubble (the hydrogen did exist) because there was no free oxygen in the vessel to combine with the hydrogen to make the explosion happen. However, the NRC did not tell the news reporters about that useful piece of information, and to this day much of the public still believes there was great danger from that hydrogen bubble. Even when the Kemeny Commission's report was issued, clearly confirming the nonexplosive character of the bubble, neither the NRC nor the media sought to carry that message loudly and clearly to the public so as to allay its fears.

I applaud REASON's efforts to get the truth about these fear-producing fallacies out to its readers. Perhaps there could be a continuing department in REASON that would debunk similar fear-inducing frauds.

A.N. Tschaeche
San Jose, CA

Taxing Choice

I was amazed and disappointed to find the article "After the Budget Ax Falls" by Dale H. Gieringer included in the May issue!…Mr. Gieringer implies that what he is proposing will provide both consumer choice and an alternative to the government providing certain "public goods." I grant that his proposal may be an alternative, but what kind of "choice" is it for the consumer? Having some "choice" in how monies are collected from you at the point of a gun (as taxes are) does not make taxation any less onerous or any more justifiable, it simply makes it a little more bearable; the pill becomes a little easier to swallow, so to speak.…

Martin L. Edwards
Los Angeles, CA

Mr. Gieringer replies: In no way is my article intended to justify compulsory taxation. Rather, it suggests an ameliorative reform that could only lower, and in no case raise, anyone's taxes. Since even Mr. Edwards concedes that charitable tax credits would provide greater (though admittedly not complete) freedom of choice, it is difficult to understand why he should be so upset.

Evidently, any proposal short of complete abolition of taxes would dissatisfy Mr. Edwards. But would he therefore suggest that we ignore such ideas as tuition tax credits or tax substitution (see Fred Foldvary, REASON, Nov. 1978)? On the contrary, experience shows that successful political reforms seldom coincide with pure ideological principles. If only socialists had rejected the income tax because it fell short of their goal of abolishing private property! In this imperfect world, where many voters are indifferent or hostile to the principles of liberty, my article suggests a practical political reform by which we might hope to replace creeping socialism with its opposite.

Taxing Problems

Mr. Machan's editorial "Stop This Stealing!" (Apr.) was interesting and true, but I think he has overlooked the basic concept of the income tax—namely, that it is based on greed and nothing more. The original income tax law passed by Congress in 1913 did not tax the first $20,000 of income. It was the intention of those who voted for this tax that it should apply only to those who had enough money to live off their financial investments. Twenty thousand dollars in those days would buy what $80,000 would today. The working class who voted for it (through their representatives) thought that it would never apply to them. And so it did not, up until about 1940, when we had to pay for military rearmament.…

In order to enforce the income tax law, we have authorized the IRS to open our mail, snoop into our banking accounts, find out what brand of car we drive, tap our telephone, and actually do just about anything they want to. If the present trend continues, we will some day have a system just as bad as that which exists in the Soviet Union. There will be only one difference: our IRS snoopers speak English, while the Soviet snoopers speak Russian.…

Income-tax collection is costing up to about $2 billion per year in salaries and fringe benefits for IRS employees. And this does not include the expenses of maintaining the tax courts or the expenses for businesses who are involved in tax litigation and the expense for a business when it acts as an unpaid tax collector for Uncle Sam. These costs are passed on to all of us in the form of increased prices for everything we buy.…

It does no good to denigrate the income tax unless you provide a workable alternative. I propose to end the income tax and replace it with a federal sales tax or a value-added tax… .The present coercive system would be replaced by a voluntary sales tax system. Those who wanted to contribute a lot to the federal government would buy a lot; those who wanted to contribute nothing and had enough determination, could do so by buying nothing and getting what they needed by barter. And no one would need government permission or have to fill out a report to do so, as we now have to do with the income tax system.

Kenneth J. Dollahite
Hayden Lake, ID

Barge Business

In the Trends column of the February issue, you applaud a recent declaration of the Association of American Railroads calling for an end to all transportation subsidies. In the same column, you repeat a charge which the railroads have tried hard to popularize, to wit: "The federal government has lavished billions on highways and waterways, providing rights of way to heavy truck lines and barge lines at far less than their cost."

There are errors in that statement which I would like to call to your attention. Barge lines do not have a right of way. Unlike trucks and rail lines, the barge lines do not travel on a specially purchased and dedicated "way" which has been set aside to be developed and used exclusively for transportation purposes. Barges compete for the use of public waterways with sailboats, canoes, rowboats, yachts, swimmers, duck hunters, and anyone else who may care to make use of the rivers and lakes on which barges move.…

Railroads, in contrast, are the only mode of transportation that owns its rights of way. Their ownership privilege gives the railroads the right to bar anyone from using or crossing that private property without their express consent. This consent has been withheld from the competing pipelines.…

The federal government assigns an average of about $600 million annually to the navigation account of the Army Corps of Engineers for operation and maintenance as well as construction expenditures on the 25,000-mile shallow-draft inland waterways system, but the federal investment in navigation represents only a small portion of all the money required to produce a waterway transportation service for the American economy. The Corps of Engineers estimates that the funds required for marine transportation in the next 20 years will amount to $74 billion, of which only 12 percent will be provided by the federal government.

It is estimated that nonfederal investments in waterway transportation facilities and services generate more than $5 billion in annual revenues for the federal government. This represents a return of at least 800 percent on its own modest annual investment in waterway transportation—and that is only the cash revenue. Not included is the value of the very large amount of intangible benefits in such areas as national defense, regional development (as in TVA), contributions to our balance-of-payments account, fuel savings, and environmental enhancement. If that is the result of waterway subsidies, then our national budget needs a lot more of that kind of subsidy payments.

Harry N. Cook, president
National Waterways Conference
Washington, DC

Mr. Poole replies: Mr. Cook's case for subsidies does not withstand scrutiny. To begin with, "sailboats, canoes, rowboats, [most] yachts, swimmers, [and] duck hunters" do not require dredged navigation channels in our lakes and rivers. Commercial barge lines do need these improvements, and it is they, not the taxpayers, who should pay for them. He also points out that industry itself invests large amounts in waterway transportation facilities. Of course it does. All that free-market advocates ask is that whatever waterway investments are now taken by force from the taxpayers be paid for instead by those who directly benefit. Is that so much to ask?