Debating a Financial Bailout

The "taxpayers" asked to "bail out" Wall Street firms that have collapsed or are in danger of collapsing because of falling housing prices might view their plight from another perspective: Their real estate appreciation was never taxed on the way up.

Take my case. I bought a condo in 2000 and sold it in 2006 for triple my purchase price price, taking my profit tax-free. My first home, purchased with my then-wife, sold for more than double the purchase price amid the housing boom, also tax-free.

Part of what is happening is an unintended rebalancing of the generous tax benefits Uncle Sam bestows on those who own a home (or two): deductible property taxes and mortgage interest, and tax-free gain on sale, among others. Now Uncle Sam has come to collect.

Tax benefits originally were elements of a rational policy to foster homeownership. Congress would be wise, after we get through this turmoil, to reconsider irrational homeowner benefits that, besides tilting capital into unproductive housing investment, contributed to the economic bubble for which we must now pay.

BENNETT MINTON

Arlington

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In evaluating rescue plans, the public should bear in mind one simple rule: If taxpayers are going to own companies' liabilities, we should also own their assets. The administration's plan would saddle taxpayers with risk while denying them any chance of benefit, and it would reward those who failed in their fiduciary duties.

JIM KLUMPNER

Silver Spring

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It is unconscionable that taxpayers should have to pay for mistakes made by financiers who paid themselves $38 billion in bonuses less than a year ago, even as their reckless investment strategies had begun to unravel. Had bankers not treated their firms like personal piggy banks year after year, Wall Street would be in much better shape. Any new bailout package should compel culpable bankers to disgorge their most recent bonuses, so that they can help clean up their own mess.

KARL VON SCHRILTZ

Washington