Balance Sheet

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ASSETS

? Potomac Fever. After decades of ossified rule, the District of Columbia adopts a tax cut valued at $300 million over five years. Personal income and business taxes will be cut and taxes on Internet sales eliminated. The unabashed goal: to attract honest, private economic oomph to the nation's capital.

? Voltage Deregulator. Mexican President Ernesto Zedillo sticks with plans to privatize the state-owned electricity industry despite criticism from labor unions and opposition parties. Investment by foreign–i.e., U.S.–companies is the bugaboo, but Zedillo says that very thing will bring $25 billion to modernize and expand Mexico's power grid.

? Ma Coax. Telecom deregulation allows AT&T to snap up cable TV provider MediaOne. AT&T now has a way into homes that does not depend on archrival Baby Bells, allowing it to sell a host of services, including long distance and Internet access. One local phone company, US West, reacts by expanding its high-speed Internet service and cutting the price by 25 percent.

? Additives Subtract. A study by the National Academy of Sciences finds that oxygen additives in gasoline do little to reduce smog. In fact, some may lead to more nitrogen oxide emissions. The EPA, which asked for the study, says the results shouldn't change agency requirements for the additives. Oh. But California has already taken steps to ban one of the additives, and the study could give impetus to the other 16 states saddled with them to do the same.

LIABILITIES

? Thaied Up. Maintenance workers for Thai Airways threaten to strike if the airline is privatized. Thai Airways is 93 percent owned by the Finance Ministry. The plan is to spin off some functions in a company with a 2 percent stake held by the Thai royal family. The International Monetary Fund is urging the change as a way to shore up the Thai economy, resulting in demonstrators holding signs reading "IMF Go to Hell." Of course, the IMF is hell.

? Lemon Laws. North Carolina is the latest state to try to ban car sales from a manufacturer directly to consumers. As automakers experiment with cutting dealers out of the mix by using the Internet and simple showrooms, dealers mobilize their lawmaker buddies to win protection. Consumers will continue to pay for the added layer of fat in the distribution system.

? Kilo-Wait Hours. Deregulation of the nation's electric utility industry proceeds in fits and starts. Many states are leaving the details up to their public utilities commissions, which will work fine in some cases, horribly in others. Worst-case scenario: States could set up mini-cartels for local power generators, making it impossible for out-of-towners to compete.

? Custom Made. The Customs Service says it needs $1.8 billion and four years to computerize its duty and fee collection system, which brought in $23 billion in 1997. If IRS experience with computer upgrades is any guide, it will take longer and more money than expected for Customs to get its 300-odd offices ready for the 21st century.

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