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BOARD OF GOVERNORS • F THE FEDERAL RESERVE SYSTEM Office C o r r e s p o n d e n c e Tn Mr. Thurston Frnm Mr* Liusgrave November 20.v&z Subject; Address by Randolph Paul A flM* I have read Mr. Paul*s address and think that it is an excellent brief statement or the difficulties and objectives of tax simplification. The statement might have been a little more positive regarding the desirability of reducing requirements for mandatory returns under the income tax (pages 26-27) might have given a little more emphasis to the simplification of the corporation income tax. Also the point might have been made that most of the difficulties arise in connection with determining taxable income rather than -with applying rate schedules. However, not everything can be said in a brief address, and on the whole I find the paper to be very good. I don't think that any specific suggestions are required. Ptc "th IJh^A — — ^ / ^AjO l^MM S^Ui AJU-J. &t,uL I fir cj Form P. R. 511 TO Mr. Thurston FROM meb REMARKS: The Chairman asked that you check over this speech as far as the OWI is concerned Miss Friedline called last night about it and then he would like to have Mr* Musgrave check for any comments or suggestions that might be made to Mr# Paul direct. CHAIRMAN'S OFFICE © TO I Mr. Eccles 11-18-43 Tou may be interested in revievdng copy of my address to be given before the National Tax Association on Llonday. If you have any comments or changes I shall appreciate your letting me know. Randolph Paul http://fraser.stlouisfed.org/ From: MR. PAUL Federal Reserve Bank of St. Louis TREASURY DEPARTMENT issshlngtoa (The following address by Randolph E. Paul, General Counsel of the Treasury, before the Hational Tex Association at the Palaer House, Chicago, is scheduled for delivery at lt80 Central War Time, Monday, Hoveaber ZZ, 1^43, ana is lor releaseat that Uae.J SIMPLIFYING ODE TAX LAWS I em at a peculiar disadvantage this afternoon. A little more than a month ago here in Chicago, I addressed a group of business men. Xj subject was "Simplification of Our Tax Laws." I am here today to discuss "Simplifying Our Tax Laws." Tou see mv dileaaia. It reaiaas me of a story which is told of the eminent natural let, Agassis. V.kea he sias to deliver his first visiting lecture in Zurich, he had grave doubts about his ability to occupy the prescribed three-quarters of an hour. He was speakinj without notes, and from time to time he glanced anxiously at the watch that ley before him on the desk. When he had spoken half en hour, he felt that he had told the audience everything he knew in the *orld. "From that point on", he said, *X began to repeat sgraelf and I have done nothing else ever sinee.* Apparently I did not ~ 2 - apparently I did not talk for thirty minutes when X was last in Chicago for I do not believe that I said everything there is to 88/ about simplification. Perhaps you will aLlow me to begin now where I left off then* Today we soatetimes think that we are victlos of a aslady which never attacked anyone before* But complaints about the complexity of our tax laws are an old story* the patient has been suffering for a long time; the disease has become a national scourge; it has even crossed national boundary lines. Causes of Complexity The first thing we discover when we attempt to diagnose this complaint is tact there is no single cause. Our tax system did not become complicated overnight. Some complexity originates la a coa&endable Congressional desire to prevent tax avoidance. Sometimes a cos&ftndaole desire to give tax relief results la complication. A 90 percent excess profits tax can he written vtiy simply. very simply. But the relief provisions which that rate makes imperative must be extremely complicated* Still another contribution to complexity stems from our manifold system of administrative and judicial interpretation. War taxstion adds its own complications. You are all familiar with the paradox on the economic front that in wertiae increased purchasing power aearvs fewer purchasable goods, the same condition that produces plentitude of income also produces scarcity of goods. On the simplification front one finds another curious paradox. War taxation leads at the same time to a general demand for simplification and a maximum of specific requests for complicating amendments. Competing Considerations fe have then a basic conflict. In tax law, as more generally, there are almost always competing considerations* What is simple may Ahfct is sizable may not be equitable* What is equitable my of necessity be complicated. In other words, simplicity and equity are often incompatible and m rre forced to choose between them. In choosing we ssust weigh advantages gained against advantages lost, knowing what we are doing when we make an election. A sufficiently desirable objective, either by way of relief or by way of preventing tax avoidance, may be worth some complication, k particular itea of simplicity say not be worth the inequity it entails. The question is one of price, end our first choice should be the simplicities that are the best bargains. Then, too, there is something ad hcipinem about simplification. Vshat is simple to one taxpayer may not be simple to another who play, a part in administering the tax. For example, it seemed For example, it seemed very desirable when we nere working on the 1942 Revenue Act to introduce collection et the source into our tax structure. You will remember that such a systea was introduced et the beginning of 1943 to expedite the collection of the Victory tax. It was extended in the Current Tex Payment £ct to cover the normal taxfendthe first bracket of surtax. In connection with collection at the source we found specific application of the maxim that one ^en'B aest is another man's poison. It is to the interest of employees that the amount of tax withheld at the source be matched as closely as possible with final tax liability. Undei—thholding may nean loss to the Goverataeat. Over-withholding may aetm inconvenience, and even hardship, to employees. But the question canact be approached only from this one angle. In the pay-as-you-go - 6 - la the pay-as-you-go procedure we were putting a burden upon employers. In one sense we were asking then to become deputy collectors of internal revenue. It was only fair, therefore, to consider their convenience, as well as the convenience of employees. This meant that we had to reduce the classification of employees to a minimum in order that the accounting problems of employers would not be too irksome. In other words, sre had to withhold on an approximate basis, grouping particular employees according to the band method. We did not wish to require employers to make specific computations which would result In exact withholding. Nor did we want to permit too many changes in exemption status during the year. k choice had to be made between the relative convenience of employers end employees, The Meaning of Simplification Wiaa ali^frurdsbecome - 7 - The Meaning of Simplification When any words becoae as popular sb Use words "tax simplification" have recently become, one may be very sure t^&t the phrase moans iaany ciiffercnt tr"m;s to iusny different people. The sords may mean so much that they seen little or nothing. Certainly the term wtex simplification* is a vague abstraction, snd it is necessary to look behind it for the concrete meanings which it holds. I have tried to gather together from conversations, newspaper stories, and revenue hearings some of these diverse meanings. From the standpoint of inaividual taxpayers and the sb&II business m n simplification means a number of things. It means a minimization of tax arithmetic. It means the elimination of unnecessary records. It means the reduction of tax foras to a few lines ahich can be - 8 - a few lines which can be filled in swiftly without digging deep into old papers. In short, it means a tax structure which tr>e casual newspaper reader can understand with no sore acmtal strain than it takes to follow Joe Palooka. Soste taxpayers probablj use the word "simplification1* in the sense of certainty. They are perplexed by our tax laws. They don't know how such they owe. The statute is filled with provisions which only the expert can understand, and he so&etbaes has a hard tine. In fact, the expert*s difficulty scmetiaes parallels the situation in which Robert Browning found himself in "The Barretts of '^iiapole Street.® You re&esaber that Elizabeth Barrett asked the poet the meaning of Boae of his lines. After Srownin. * had read them aloud three tiaes he said: "Elizabeth, when those lines were written, God and Robert Browning knew what they meant. How God alone knows." Basle policy conflicts 9 •» Basic policy conflicts are frequent in the statute; the essential pattern of objective Is vague* Concepts have changed; the desire to prevent inflation is a novel tax motive. Taxation has new folkways, the future is a black imponderable. In all this whirl taxpayers glance with nostalgia toward the old certainties they once thought they had, and the present becomes sore uncertain than ever* From the standpoint of the treasury simplification has still another definition. We certainly recogniEe that the success of the income tax depends on achieving the utmost desirable simplicity. This is essential to taxpayer good-willy which in tarn is essential to successful administration. Bat we have our own internal problems, which at the moment are greatly intensified by oar inability to secure accounting machine ly and hold personnel. The number of returns whleh must be handled by the Bureau -10- be handled by the Bureau of Internal Eevenue is a vital matter, but it ia even more vital that these returns be as simple as possible. The difficulty with complicated returns does not end with their filinc; they must be audited. Correspondence may be necessary. Interviews with taxpayers end their representatives may be required. The number of direct contacts with the individual taxpayer, and the clerical work of keeping accounts with him and his employer, are matters of intense concern to a Bureau of Internal Revenue which desires to afford eveiy aid possible to puzzled taxpayers. Finally, there is the process of judicial review. The simpler our tax laws are mace, the easier the whole process of administration and interpretation becomes. Dual Hature of the Problem Simplification is & vast subject. There are things that may be done quickly - l i my be done quickly on the basis of sufficient knowledge at hand, and there are things which it would be unwise to attempt without a further clarification of issues and considerable additional investigation of law and facts. In this latter category fall changes In the "reorganisation* provisions end more satisfactory correlation of the income, estate and gift taxes. Powers of appointment remain troublesome, but perhaps It is well to make haste slowly in this highly technical field of estate tax law. Trusts are a thorn in the flesh of the income, estate, and gift taxes. The Treasury is working upon these and many other problems, and has called upon the outside Tex Bap for suggestions end advice; a special committee is working upon estate and gift tax correlation. We hope to be able to deal intelligently with these problems when we get to the 1944 administrative revenue act, ,. Simplification at the Return Level In 1932 exemptions and - 12 - Simplification at the Return Level In 1932 exemptions and national income were at such a level that slightly less than 2 million returns sere filed with the Bureau of Internal Revenue, For the year 1344 it is expecteu that more than 44 million returns will be received. This increase In the number of taxpayers intensifies the need for simplification. The income tax must permit of simple acts by taxpayers if full compliance Is to be achieved. Most taxpayers are not concerned with what the statute or the regulations or the court decisions say. To the man in the street the income tax return and the instructions on that return are the whole story. It is logical then that simplification should commence at the return level. The Treasury has recommended a number of changes in our tax structure which will help to achieve simplification at this level. I should - 13 - tills level, X should like to discuss some of these changes with you in detail. We shall need your help. In the campaign for simplification you can help best if you understand what we are trying to do. The Earned Income Credit It the suggestion of the Treasury the Rouse Ways said Means Committee voted the elimination of the earned income credit new in the statute. This credit, as you know, is 10 percent of earned net income or of net income, whichever Is lower, up to $14,000. The first $3,000 of income, whatever its character — even though it be dividends or bond interest - is presumed to be earned income. The credit is only for normal tax purposes, which means that its maximum value at the $14,000 level Is $84. If this earned Income - 14 - If this earned income credit were & true earned income credit, it might be worth the complication it Involves. The extension of the credit to the first $3,000 of net income, irrespective of its character, thwarts the objective of favoring earned income. This presumption is required by administrative necessity; it -sculd be impossible for the .Bureau to check the type of income received by the millions of taxpayers in the lowest brackets. Since we cannot aohieve a practicable discrimination in favor of earned income, we may as well avoid the complexities inherent in an unsuccessful attempt. The elimination of the credit will he a distinct step toward simplification. Consolidation of Normal Tax and Surtax Fart of the trouble with tax calculation arises from the fact that we have so many different rates. As a partial and palliative remedy, the - IS palliative remedy, the Treasury has recommended the consolidation of the normal tax and the surtax. You are well asfcre of the defects of the present system. The earned income crecit and the issuance prior to 1341 of partially exempt federal bonus ere the only regaining excuses for two concepts of net income — one for normal tax purposes and the other for surtax purposes. If we eliminate the earned income credit, only one reason remains for submitting to the difficulty involved in expressing the rates of tax. This complicates returns, making necessary two statements of net income and two computations of separate tax liability which must be added together. The obvious solution is to integrate rates into onet schedule and limit ourselves to one concept of net income. Oar rate for the first ~ 16 - Our rate for the first $2,000 of net income could then he 19 percent — 6 percent present normal tax plus 13 percent, the first surtax bracket. For the second $2,000, the rate could be 22 percent — 8 percent plus 16 percent. This simplification can be extended throughout the rete structure. Treatment of Tax-Exempt Securities One precaution need be taken. About 7 billion dollars of partially tax-exempt securities are outstanding. We do not wish to enlarge the benefits of this exemption, nor do we wish to repudiate a contract of exemption. The status quo can be preserved by allowing, in lieu of the present credit against net income, a credit against the tax of 6 percent of partially tax exempt interest, or of net income after the exemption, whichever it lower. This would give partially tax-exempt bondholders tax-exempt bondholders the exact benefit they possess today and would limit extra computations to the few taxpayers who own tax exempt bonds* I era confident that such an amendment would be constitutional* - 18 Elimination of the Victory Tax In the 1942 Act the Senate finance Committee inserted, and the conference corajaittce accepted, the famous "Victory" tax. The object was to reach by a special tax incomes below the exemption levels of the 1942 Act — $1200 for a married person without dependents, $500 for a single person and $850 for each dependent. As a natter of fact, the Viotory tax collected from persons in those low brackets only about $300,000,000 of revenue. The balance of the $3 billion yield of the tax cause from persons already subject to the regular income tax. It is a matter of indifference to these higher bracket taxpayers whether a particular dollar of tax paid is labeled Viotory or income tax. To you, I need not elaborate upon the complications of the Victory tax* Its speoial set of deductions results in a separate conoept - 19 - & separate concept of taxable income. The tax has a different set of exemptions. The dependency credit is recognised only in a complicated postwar credit. The faulty structure of the tax was recognised by Congress whon it eliminated the postwar aspects of the credit for 1943. The "ays and Means Committee has followed by integrating the tax with the regular income tax for 1944. In hla statement of October 4 before the &sys and Means Committee, the .Secretary of the Treasury proposed the elimination of the Victory tax and the lowering of the regular exemptions for married persons without dependents from §1,200 to $1,100, and frost 1350 for each dependent to $300. The Secretary also proposed raising the surtax and the elimination of the earned income credit to recapture some of the revenue lost by the elimination of the - 20 - elimination of the Ylctory tax* the adoption of theee proposals would have enormously simplified returns. Indeed, it is doubtful whether any adequate simplification can be achieved without the eli.iine.tion of the Victory tax. The Ways and Means Committee has adopted a minimum tax plan in lieu of the Victory tax. The minimus tax is three percent of regular statutory net income with exemptions of $500 for a single person, 1700 for married persons without dependents, and $100 for each dependent. Married persons filing separate returns are entitled to a single person's minimum tax exemption, and are required to take a single person's regular tax exemption. This proposal slso increases the normal tax to 10 percent. X shall not burden you with a long explanation of the defects of this substituted proposal. Tou will note that It eallft for a set calls for & set of exemptions different from those applicable for purposes of the regular income tax. This necessitates a table, giving & series of breaking points showing which tax applies — the minimum tax or the regular income tax. The treatment of joint and separate returns presents further complications as to choice of return. There are several nones in *hich one of two foras of filing is more desirable, the limits of the sones varying with dependency status and division of inoome between husband and wife. Taxpayers will be forced to make alternative computations in order to ascertain whether to file Form 1G40A or Form 1040 and whether to file joint or separate returns. Simplicity Is not to be found In mechanical forms which aire not easily understood. It calls for a tsx the basic outlines of which - 22 - outlines of which can be explained by one neighbor to another, the minimus tax, and the table it requires, can be explained by one expert to another, but not by neighbors over the baok fence. It seems clear that the collection of about $300,000,000 of tax. from thesq particular individuals, less than 2 percent of our income tax collections from individuals, is not worth the complex! ty involved in this minimum tax. Moreover, to exact a tax from incomes at the subsistence level is a questionable contribution to the fight against inflation, the revenue will not be lost, since It can be distributed throughout the surtax brackets. Extending use of Form 1040& I now turn to a possible simplification — a homely remedy for the deductions tangle* Tou are familiar with Supplement T, whieh permits the use - 23 - which permits the use of form 10401 by taxpayers having gross income of not acre than $3,000 consisting of salaries, dividends, interest and annuities. It has been suggested that the $3,000 boundary be raised. There are 6 million taxpayers having gross incoae between $3,000 and $5,000, of which 2 million taxpayers would be eligible to use Form 1040A, if it were extended. It would be a convenience to taxpayers with incomes above $3,000 to use Form 1040A. Taxpayer convenience coincides with administrative economy, since the estimated cost of handling the simpler form is less than half the cost of handling the longer Form 1040. On the other hand, the extension I have suggested would cost about $17 million in revenue, and no doubt many persons entitled to use the simplified fora under the extension would still compute their - 24 - still oompute their tax both ways in order to he sure that they were paying the lowest possible tax. W* are working on this problem in the Treasury and hope to present definite recommendations to the Congress in the near future* Eliminating Some March 15 Returns Now that we have collection at the source, you have heard much discussion of the possibility of eliminating March 15 returns for persons entirely in the first surtax bracket, whose liabilities are collected at the source. This is another matter under serious consideration In the Treasury* There are arguments on both sides of the question* On the one hand, it is certain that the elimination of Maroh 15 returns would simplify taxpayer compliance and reduce taxpayer irritation. The persons relieved of filing returns would be those in the lowest taxable bracket; these taxpayers are least familiar with tax procedures and find the T8»Mwg - 25 - and find the o&icing of returns most difficult. It is also argued that paper work would he reduced and administration simplified. On the other hand, several important considerations militate against the elimination of returns. If returns tre eliminated, administrative controls over taxpayers and employers will he weakened. The morale value of a tax return made under penalty of perjury will be lost, the possibility of a cross-check of employee returns against employer reports will be gone. It Is well to remember also that taxpayer returns serve as the basis for adjusting the over-collections and under-collections which ar& inevitable in any withholding system. In caBers of part-year unemployment, change of family status, and double employment, for example, these adjustments may be quite substantial, then, too, the function which returns play in - 26 - returns play in educating citisens in their role as taxpayers and in stimulating a sense of direct participation in government should not be overlooked. In discussing the elimination of returns it is important to recognise that different people mean different things by the phrase, "elimination of returns'1. Some mean that we should go from an annual accounting period to a payroll accounting period, and that withholding should itself be the tax. Under this interpretation a broad class of taxpayers would be neither required nor permitted to file, the inequities of such a solution and the great difficulty of drawing a line between filers and non-filers make its adoption highly questionable. Other people mesa by "elimination of returns" that the annual accounting period be retained, but that only those who wish to claim refunds - 27 - to claim refunds and those who have substantial additional taxes to pay would be permitted or required to file. A third inte pretation of "elinination" is that taxpayers would be required to furnish only a niniraua of information; their taxes would be computed for then by the government and refunds or additional assessments would be issued without further action on their part. These alternative solutions and others are being closely examined in the ireasury. Graduated withholding iiisipliiic&tion is possible also in the domain of withholding. One suggestion, originated with Judge Vinson and recently made to the «ays and ^ieanu ^onmittee, was that withholding would he on a ^ross basis under a system which would enable taxpayers to understand instantly what percentage of their salaries was being withheld at the source. The Treasury has recomended - 28 - Treasury has recontended to the Coamlttea that collection at the source he made to apply to the taxpayer*s full liability rather than merely to his partial liability under the normal tax and the first bracket of surtax. The method for accomplishing this result would be to have a series of withholding rates applicable to gross wares, as a substitute for the present precise rates. This series of withholding rates would be expressed in tables based on the status of the taxpayer. There eould also be t&blca calculating the amounts to be withheld, as at the present tine. Any objections to the inaccuracies resulting from the wide brackets in the present-law tables would be minimized by providing substantially narrower brackets over the ranges of wage within which most employees fall. Employer groups with - 29 - Employer groups with whom withholding problems have been discussed,have indicated the desirability of graduated withholding from the standpoint of their relationships with employees. At the time for filing the first of the new quarterly declarations this past September, several large employers reported that requests from employees for information as to total amounts of wage and of withholding over the year, as well as for assistance in the computations and the preparation of the form, resulted in significant additional burdens for their tax end accounting staffs. The question arises whether graduated withholding would unduly complicate the preparation of payrolls, Careful study, as well as discussions with employer groups, indicates that little or no extra burden upon employers would result. Investigation of this - 30 - Investigation of this proposal reveals farther interesting data. At present the first $2,000 bracket covers about 33,000,000 taxpayers. The remaining 23 brackets cover less than V,000,000 taxpayers. The lesson of these figures is that our rate structure lacks refinement for the great majority of taxpayers. However, the moment we try to provide better progression, we have to face the necessity for graduated withholding. As I have said, this can be accomplished. The by-product of graduated withholding — which enables us to accomplish the desirable objective of refining the rate structure for the reat majority of taxpayers — is the elimination of many quarterly declarations for persons in receipt of salaries above the present first bracket of surtax. A greater number of declarations could be eliminated If In addition we raised - 31 - addition we raised the present requirement relating to outside income, other than salaries, from vlOD to a somewhat higher figure. Additional ^w^estions for Sj-^llfying Returns I do not want you to think that X have attempted to cover even the limited subject of simplification on the return front. Many additional suggestions are in the mill which, I might add, grinds slowly. Could we have different filing dates by classes of taxpayers, corporate end individual, or by divisions within one class of taxpayers on an alphabetical basis? How may return forms be set up to enable taxpayers to do their arithmetic more easily? These are merely examples of activity in the Treasury in Its constant effort to iaprove the administration of out* tax laws and to make taxpayer compliance less burdensome than It no* Is* Corporate Tax Simplification So is* X have boon - 32 - Corporate tax Simplification So far X have been talking about simplification on behalf of individual taxpayers* X have limited ay discussion of that subject to the return front. Much ir*ore remains to be said on other individual tax fronts, but I should like to say a few words before X close regarding one item of corporate tax simplification. Capital Stock and the Leclared-Value Excess Profits Tax In 1942 X attempted on behalf of the treasury to persuade Congress to eliminate the capital stock and the declared-value excess-profits taxes. I was unable to persuade the *»ays and Means Comittee, but was more successful with the Senate Finance Comiittee. the latter committee receded in conference, however, and we still have in the statute these utterly indefensible taxes. They are Indefensible for many reasons, mot the least of whieh •13 • not the least of which is that the sane revenues could he collected from substantially the same corporations by increasing the corporate tax rate. These te-xes are, therefore, nothing more than an unreasonable duplication in the corporate tax structure, requiring for compliance scarce manpower and trained personnel* The Treasury did not again in 1943 specifically recouuaend the elimination of the capital stock and declared value excess profits taxes, but I would like to discuss the subject briefly with you because I believe the days of these taxes are numbered. I would also like to secure your cooperation in effecting their ultimate repeal. You all know the history of the capital stock tax. Beginning in 1917 and through 1986 we had a capital stock tax based upon aotual, -34- based upon actual, and not declared, value* The tax was abandoned because of valuation difficulties, the year 1933 saw the origin of the present type of capital stock tax, ibieh totally disregards actual value and is based upon the value the corporation wishes to declare, with no regard for book* market value of assets, or earnings record. The function of a declaration is simply to take out insurance against the declared value excess profits tax* this tax penalizes corporations which guess wrong in making their declaration. In actual practice corporations make their declaration of value entirely with the purpose of saving themselves from the heavier ir pact of the declared value excess profits tax. Xou may be interested in the relative impact of the tax upon large and small corporations* The treasury's research upon this point leads - 35 - upon this point leads to the very clear conclusion that saall corporntions ara relatively herder hit by the tax than are larger corporations, This is because ejaall corporations experience fluctuating earnings to much greater extent than do large corporations, i or example, in 1S37 corporations with total rssets of less than £50,000 hed an average declared value of 197 percent of their equity capital while corporations with 50 million dollars or nore of total assets had an average declared value of less than 62 percent of equity capital. In 1937 the ratio of tax to norml tax net incoae was 2.7 percent for corporations with under §50,000 of total assets. The ratio for corporations with assets of 1100,000,000 and over was 1.8 percent. In 1936 corporations with net incoiae of under $5,000 paid -36- under $5,000 paid capital stock and excess profits taxes equal to 6.5 percent of their aggregate net income while corporations trith net incomes of IS million and over paid taxes of only X percent of their net income. It is argued by some that this tax is a suitable method of taxing deficit corporations.. I had thought that our purpose today should be in the other direction * to tax corporations with swollen war profits at high rates and to relieve corporations with deficits occasioned in large part by economic events beyond their control. It is true that the old capital stock tax of the Twenties fell to a considerable extent on deficit corporations because those corporations were obliged to pay taxes on the fair value of capital stock regardless of their expectations of incog* or deficit*. Under the present tax - 37 - the present tax the ar.ount of tax paid by deficit corporations is relatively small - only about 11 percent of total collections at 1942 levels of income. i*or does this small amount of revenue come in an equitable fashion from deficit corporations, the taxes falling on such corporations bear no relation to equity, to capital, to total assets, to invested capital, to gross sales, to the size of the deficit, or to any reasonable measure of privilege or taxpaying ability, the impact of the tax is capricious. It depends upon the accuracy of a forecast made by the corporate directors at a time when prophecy is a perilous adventure. In all these ciroumstanoes there remains little excuse for encumbering corporate tax structure with this freakish tax. Conclusion "Simplify Our tax Laws* - 43 - Conclusion "Simplify Our Tax Laws" ha a become a kind of slogan. Slogans are valuable instruments at times. They engender the enthusiasm needed to produce results. i>ut they m y also be dangerous weapons. Applied to tp.x lew they are dangerous because they compress too much into too few words - a fault, I hasten to add, which cannot always be fairly ascribed to lawyers. Thoy end by stalling nothing, or perhaps whatever anyone wants then to laean. In meaning all things to all men they mean nothing to any man. There is profound significance in the tale of "The Blind Men and the Elephant:" It was six men of Xndostan To learning muoh inclined &ho went to see the elephant (Though all of them were blind). That each of observation Might satisfy his mind. The first approached • 39 The first approached the elephant And, happening to fall Against his broad and sturdy side ^t once began to bawls a Ood bles3 met but the elephant Is very like a wallJ8 The second feeling of the tusk, Cried: "HoJ what have we here iio very round and smooth and sharp? To me 'tis mighty clear This wonder of an elephant Is very like a speartB The third approached the animal And happening to take The squirming trunk within his hands Thus boldly up and spake: n X see," quoth he, "the elephant Is very like a snake!" The fourth roached out his eager hand, And felt about the kneet *ihat most this wondrous beast is like Is aighty plain,* - 40 - Is mighty plain," quoth has "•lis clear enough the elephant Is very like a tree!" The fifth who chanced to touch the ear Said: "E'en, the blindest man Can tell what this resembles most; Deny the fact who can, This marvel of an elephant Is very like a feat* The sixth no sooner had begun About the beast to grope Than, seizing on the swinging tail That fell within his soope, "I see," quoth he, *the elephant Is very like a rope!" And so these men of Indostan Disputed loud and long, Each in his own opinion Exceeding stiff and strong. Though each was partly In the right. And all were in the wrong t mmm So eft In theologic - 41 - So oft in theologic wars 'Axe disputants, X ween, Rail on in utter ignorance Of What each other mean, And prate about an elephant Sot one of them as seen! In simplifying out tax laws we need, like the men of Indostan, torecoverour sight, ^e need the miracle of restored vision so we can see the whole elephant. oOo
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