Politax

Comment recently went the rounds of the press that Secretary of the Treasury Mellon is not a politician. The occasion of the comment was a renewed affirmation on the Secretary's part that he will ask the next Congress to reduce the surtaxes on incomes.

The Secretary's argument is simple. He is not anxious to take money out of people's pockets, whoever they be; he is anxious to put money into the Government's pocket. He believes that decreasing surtaxes is the way to do this, and points with considerable justification to increased Government revenue this year which has followed the reduction of maximum surtaxes from 65% to 50% and the abolition of the excess profits tax. The reason for this, he believes, is less tax evasion either by falsification of returns or by investment in tax-exempt securities, non-productive forms of investment. He is inclined to think that the maximum surtax should be not more than 25%.

The politicians see the other side of the shield. Within not much over a year many of them must stand for reelection. Their constituents are anxious to see the other fellow, the fellow with more money, taxed. If the surtaxes of the rich man are lightened, the average constituent feels that he (the poor man) will suffer, regardless of the fact that the Government may get more money. The La Follette insurgent group are potent fosterers of this impression. They maintain that to burden the rich is to unburden the poor. The argument has a popular vote-getting appeal. They say that there is a coming soldier bonus that must be paid for.

The soldier bonus is now, in truth, something more than a likelihood. But if Secretary Mellon is right (and there seems to be much well founded opinion that he is), to reduce the surtaxes would be the best possible way of preparing for a bonus. He holds simply that to burden the rich beyond a certain point is also to burden the poor. Nevertheless, the insurgents in Congress demand that if there be a revision of income surtaxes it be upward instead of down, with excess profits taxes restored. They charge Secretary Mellon with favoritism towards the wealthy. It is probably true that Mr. Mellon does not understand the vote-getting value of the political slogan: " Soak the rich."