Effectiveness of Tax Breaks Is Questioned

By EDMUND L. ANDREWS

WASHINGTON, Oct. 5 - Proposals to use tax breaks for rebuilding areas devastated by the recent hurricanes may provide only limited help to people and businesses that suffered actual losses, according to many economists.

The biggest beneficiaries could turn out to be companies from outside the devastated areas that have big federal contracts to carry out cleanup and reconstruction work.

President Bush has proposed a plan to turn much of the Gulf Coast into a giant "opportunity zone" in which businesses would receive special tax write-offs for new equipment and construction.

In Congress, some lawmakers are pushing more ambitious plans for the damaged areas that would eliminate taxes on capital gains and inheritance taxes and give companies a tax credit for each worker in the area they hire.