LETTERS
LETTERS Shabby conduct Although the reference to me as a "charity expert" will probably make my life miserable by inflating the expectations of my friends, readers, editors, etc., I...
...Before you urge a specific implementation of tax policy, you owe your readers an explanation of the degree of progressivity you feel is appropriate...
...I am well aware of the microeconomists to whom Glick and Feuer refer...
...Any decision to return to higher marginal rates will almost surely bring new efforts to tax capital gains less, which will in turn generate afresh schemes to convert income into capital gains (aka tax shelters...
...Mondale found little media or grassroots interest in federal charity legislation at the time...
...In my view, the fact that the Mondale hearings occurred in the middle and wake of Watergate fully explains why Mr...
...How progressive should the tax system be...
...Something else is needed...
...The tax reform maintains the distribution of burden across income classes by eliminating primarily deductions and adjustments useful to upper income classes...
...Reich should have cited them, and should have at least mentioned in passing that their formal theoretical and empirical investigations lead to a somewhat less optimistic view about the virtues of worker ownership...
...I assume that utility functions are the products of social life, of culture, and thus shift in reponse to changes in culture...
...High marginal rates created enormous incentives to pervert the tax system in favor of special interests, and generated many of the worst features of our political system...
...That very day, I had responded to an IRS letter asking why a client of mine assigned its Blue Cross plan a three-digit number beginning with 0 instead of with the appropriate 5. That doesn't strike me as an underfunded organization...
...Rue, there are many instances where inefficient organizations persist because of political or market power...
...Pitching pillars You do your fine publication a disservice in your unsupported praise of Speaker Jim Wright's proposal ["Tilting at Windmills," January] that the top tax rate be kept at 38.5 percent after this year...
...The reason we don't have more worker ownership, as I tried to suggest in the article, is that the market, as presently constituted, fails to reward trusting behavior and thus fails to reward changes in the structure of corporations that might induce more collaborative activity...
...Robert Reich replies: "If worker ownership is such a good idea, why isn't it here already...
...RANDALL A. MAYS Vienna, Virginia Charles Peters replies: Landing on a carrier deck does take courage...
...The awful truth about our charity system is that it has inspired shabby conduct by the most well-meaning people and most respected organizations...
...In any event, how to choose among competing organizational forms has recently gained renewed attention among some economists and political theorists, from whom Reich borrows heavily for his analysis...
...I am convinced they do, and are beginning to feel insulted that charities believe contributors are too stupid to understand that kind of information...
...Had he attended more diligently to the arguments advanced by Oliver Williamson, Gary Becker, and Thomas Schelling, for example, his article would have been substantially enriched...
...The 28 percent rate was key to the decision to tax all income alike, rather than to tax income earned from capital less than income earned from labor...
...JAMES M. BURRESS Middletown, Rhode Island The problem with excerpts Robert Reich argues that the hierarchical organization of work is flawed, and that worker-owned firms are inherently more efficient ["Enterprise and Double Cross," January...
...HENRY GLICK Philadelphia, Pennsylvania MICHAEL J. FEUER Washington, D.C...
...They begin, as do most microeconomists, from premises different than mine...
...After years of effort, the United States has fundamental tax reform, and before it even takes effect, you are proposing to knock out the pillar of that reform...
...Why, then, have we not seen the gradual displacement of hierarchy by this allegedly superior mode of organizing...
...The authors did make two errors, which certainly did not detract from the value of their article, but which I feel should be pointed out...
...but worker ownership is not a new idea, and the fact that it has never emerged as the dominant mode of production strongly suggests that its inefficiencies more than outweigh its potential advantages...
...Glick and Feuer ask the rhetorical question that conservatives and free-marketers love to ask and which, taken to its logical conclusion, always points to the futility of reform...
...When Glick and Feuer buy the book (as I'm sure they will, as I heartily urge all readers to) they'll find several chapters devoted to answering their questions in greater detail, coupled with marvelously insightful additional analyses, and many wonderful footnotes and citations...
...My article in The Washington Monthly is an excerpt from my upcoming book, Tales of a New America, to be published in late March...
...Danger on the deck I'm writing to point out what I believe was an inaccurate statement in Charles Peters's November column that John Lehman never risked his life for his country...
...We rely upon the political process to make those trade-offs, and it did...
...WILLIAM J. RADUCHEL Norwalk, Connecticut...
...The A-6 itself was designed to fly low to the ground at night and in bad weather to reach its targets...
...They take individuals' utility functions as given, and then ask how organizational incentives can be arranged to maximize positive trades and minimize exploitation...
...Normal peacetime flying around on and off a ship also leaves little margin for error...
...I apologize to John Lehman...
...Its nose is filled with 20-year-old electronic systems and if one of these fails while flying just above the treetops the plane can crash...
...I had to laugh when I read in "Faith, Hope, and Chicanery" that the IRS doesn't monitor charities' tax returns because its Employee Plans and Exempt Organizations Division is underfunded...
...This may be proper, but doing so involves complex trade-offs between efficiency and equity...
...LETTERS Shabby conduct Although the reference to me as a "charity expert" will probably make my life miserable by inflating the expectations of my friends, readers, editors, etc., I am writing to praise John Wark and Gary Marx for "Faith, Hope, and Chicanery" [January], which thoroughly documents some of the more outrageous abuses of our purported charities and incisively explains the failings of the system in which they operate...
...Carrier aviation is not the safest business in the world due to the complexity of the machinery involved, the weather, and a number of other factors...
...HARVEY KATZ Washington, D.C...
...The root of the problem is the same as that of the Iranian-contra scandal—secrecy and lack of accountability...
...Second, the last name of Father Guido John Carcich, mastermind of the Pallotine Fathers scam, was spelled incorrectly...
...It would be wrong to conclude that contributors do not want to be told at the time of solicitation how their charity dollars are being spent...
...Do you favor those as well...
...It's my understanding that he is a Naval aviator and a reserve aircrewman on the A-6, an attack plane that operates from aircraft carriers...
...It was in 1960 that Mondale, then attorney general of Minnesota, exposed the Sister Kenny Institute fraud, and was instrumental in bringing its perpetrators to justice...
...We should revisit those trade-offs when we have experience with the new law, and try not to reopen such a complex decision piecemeal...
...It is these authors, after all, who have explored the importance of opportunism, investments in worker training, and trust in the efficient organization of economic transactions...
...First, Walter F. Mondale conducted his investigation of children's charities during the seventies, not the sixties...
...Retaining the 38.5 percent rate implies a decision to significantly increase the tax burden on those classes...
...I ask how different organizational environments—different cultures—can bring individual utility functions into better line...
Vol. 19 • March 1987 • No. 2
