Publicity

By the last Congress that framed the 1924 tax law, it was written into the law that the Commissioner of Internal Revenue should open to the public a list of the names and addresses of taxpayers together with the amount each paid. Last October (TIME, Nov. 3, NATIONAL AFFAIRS, PRESS, BUSINESS), the Commissioner of Internal Revenue did so. Promptly, many newspapers published parts of the lists. Promptly, someone discovered in the voluminous tax law a clause which forbade the publication of income-tax returns in any manner not provided for by law. Soon after, test cases were started against a number of newspapers, the Government contending that the law authorized the tax lists to be open to public view but forbade them to be republished in the press (TIME, Dec. 8).

Last week, the U. S. Supreme Court decided the issue. Two of the test cases were before it--against The Kansas City Journal-Post and against The Baltimore Post. Senator James A. Reed of Missouri and onetime (1916-1921) Secretary of War Newton D. Baker respectively argued the cases.

The Decision. Justice Sutherland wrote the decision for the Court. Said he:

"Information which everybody is at liberty to acquire and the acquisition of which Congress seemed especially desirous of facilitating, in the absence of some clear and positive provision to the contrary, cannot be regarded otherwise than as public property, to be passed on to others as freely as the possessors of it. The contrary view required a very dry and literal reading of the statute, quite inconsistent with its legislative history and the known and declared objects of its framers."

The Significance. In deciding that the press has the right to publish tax lists opened to inspection by the Government, the Court merely clarified a dubious provision of the law. The Court made it plain that it did not pass on the wisdom of tax publicity.

The Result. The Bureau of Internal Revenue is preparing to make public, some time after July 7, the tax returns made this spring. The Court's decision insures that these returns may be published in the newspapers, without penalty. The Court's decision also insures that the question of tax publicity will be thrashed out again in the next Congress. The Administration, led by Secretary Mellon, is prepared to fight against publicity. Such Senators as Mr. Couzens, Mr. Borah, Mr. Norris, Mr. King have already predicted that there would be no repeal, urged that there be none. Messrs. Couzens, King, Norris have in fact demanded more publicity than the present act provides--publication of other facts besides the amount of the tax paid. A storm seems brewing in the offing.

Arguments against publicity:

1) That it is a breach of pledge; for it was well understood, when the 16th (Income Tax) Amendment to the Constitution was ratified, that there would be no violation of the privacy of the affairs of persons or corporations.

2) That it is unfair to business rivals because it indicates when one's opponents are hard pressed financially and enables one to exert undue pressure at such times.

3) That it aids swindlers, by supplying them with lists of people with money whom they may importune to invest in fraudulent enterprises.

4) That it furnishes material for scandalmongers, demagogs and preachers of hate.

5) That it encourages tax evasion, legal (by purchase of tax-exempt securities, etc.) and illegal, by people who wish to keep private the amount of their incomes.

Arguments for publicity:

1) That it discourages the making of false returns.

2) That it enables persons who have knowledge of others' incomes to call the attention of the Government to attempts to evade taxes.