Rostenkowski’s Deficit Plan

In reply to Martin and Kathleen Feldstein’s article on cutting capital gains (“Tax Cut Would Foster a Sounder Economy,” Op-Ed Page, March 11), they should not overlook one adaptation that would help make it more appealing to voters concerned over revenue loss: Make the new rate applicable to acquisitions effective henceforth and not grandfather prior holdings.

This would make all the real estate gains to date fully taxable along with long-term holdings in other markets. After all, isn’t the argument for reduced taxes to encourage “new” savings and investment; no reason to go retroactive since it would not help--it could actually hinder the program for tax revenues. By making the law effective today, it would encourage individuals with capital gains to unload securities with the old-tax (28%, or more) penalty and reinvest so that any subsequent gains would be taxed at the new rate. This would not only generate revenues but may encourage some investors to update their investment parameters.

ALBERT C. FARRELL

Beverly Hills