For an Intelligent Secretary

When scholarly, able Roswell Magill was Under Secretary of the U.S. Treasury, he performed many a service for taxpayers. This week Mr. Magill performed another one. He and the Committee on Postwar Tax Policy, which he chairmanned through 16 months of work, put out A Tax Program for a Solvent America (The Ronald Press Co.; $3), the most comprehensive yet readable of all recent tax studies. It is also, the committee hopes, what an "intelligent and realistic

Secretary of the Treasury" might present to Congress, and have a good chance of putting into effect in the first "normal" year, i.e., about 1948.

Unlike the plans of Ruml-Sonne, the Committee for Economic Development, et al., the committee makes no guess at what the national income may be, come normal times. What it does do is set up three different budgets of $15, $18 and $22 billion based on national incomes of $115, $125 and $140 billion. Then it drafts alternative plans of raising revenue to meet the budgets in a way to provide the greatest incentive for business to make jobs and employment. The committee's idea was that federal spending must be cut, that the budget must be balanced yearly. As the best method of doing this, the program recommended that:

P: The 3% normal tax on individual in comes be eliminated and that only surtaxes apply, these to be fixed at the initial rate of between 15% and 20%, depending on the size of the budget.

P: Corporation taxes, as a general rule, be set no higher than income taxes.

P: The excess profits tax be repealed, although the carry-back of unused excess profits tax credits be retained for two years.

P: Estate, gift and gasoline taxes be collected only by the states.

P: The capital gains tax be left unchanged for at least five years.

P: A 5% federal sales tax be imposed if the budget is $22 billion. The committee feels it would be hard to raise enough cash to balance the budget otherwise.

The committee also lifted its voice for excise taxes, arguing that in relying almost entirely on income and corporation taxes, the U.S. is relying on a broken reed. Example: during the depression, U.S. tax revenues were cut in half as the national income plummeted. In England, where the income drop was great, revenue remained steady, thanks to the British system of levying heavy excise taxes. In effect, the committee argued: if alcohol is taxed, why not tea and coffee?

Many of the recommendations, as the committee was well aware, are not new. But where the committee parted company with other planners, notably Beardsley Ruml, was in insisting on a budget balanced every year rather than over the business cycle. Its chief argument was that deficit spending is a "narcotic" which, once used, is a threat of progressive inflation.

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