Milking the Mice

It was the one week of the year when the average citizen was really close to the Federal Government. He had to be. No matter how much he wriggled, the Internal Revenue Bureau would grab his wrist, yank him off balance, hiss for quiet, and take his jelly beans away from him. If he tried to hide them, he ran a good chance of having his marbles, jackknife, ocarina and super-magnifying atom ring confiscated, and his pants warmed with a shingle.

Though the whole process was one of mute foreboding, like a visit to a dentist or a piano teacher, the average citizen held still for the frisk and sometimes even managed a wan smile. By dint of withholding and pay-as-you-go plans, the government usually had his tax money by March anyhow. And this year, because of tax law changes in 1948, he could experience a temporary and spurious elation--of approximately 50 million taxpayers (5,000,000 fewer than last year's record total), 80% would get rebates.

The Hidden Flaws. But none of this altered the grey toil of entering item 6, and subtracting line 2 from line 1, or eased the dogged pursuit of deductions. The task of home accountancy seemed to grow more harassing every year. And in mid-March, the man who had preferred not to think how much money the government was getting out of his check every week, had to face up to the spectacle of his tax total and sign his name beneath it.

In doing so, few could avoid fascinated and furtive speculation as to just how much the Treasury would stand in the way of claims for reimbursement. The Government, which got enough milk from enough mice to make a very large cheese, pretended not to notice hidden flaws in the citizen's moral fiber. It maintained a bland and jolly attitude about the whole thing and publicly assumed that every man was rushing to the mailbox with a scrupulously honest accounting of his financial status. But from behind this smiling front, it watched the populace beadily; the Internal Revenue Bureau already has 45,000 people at work, and this year added 1,950 more gumshoe accountants. In fact, the bureau spent $1 for every $200 it collected, including about $100 million on enforcement.

It hesitated to prosecute (last year only 424 criminal actions were filed against Federal tax delinquents). The problem was, the case had to be airtight against the erring taxpayer; for one thing, judges and juries were apt to sympathize with the fellow, feeling that after he had paid up what he owed, and a 50% additional penalty for fraud, he had suffered enough. But the garden variety of sinners were informed of what the Internal Revenue Bureau grandly calls "innocent mistakes" in such grating terms that almost all broke into a heavy sweat and laid the money on the line.

The Poor Millionaire. People with incomes of $10,000 or more made up only 1.79% of all taxpayers, but they paid 42.14% of the tax. Only the returns of people in high income brackets got automatic, detailed inspection. But the average man could get scant comfort from this-- all returns were checked for arithmetic and obvious larceny, and 150,000 would be picked at random during 1949 and investigated down to the last deduction.

Even a man who made a million dollars a year (there were only 94 by the most recent count, as compared with 513 in 1929), would feel a certain caution after paying up to $770,000 in tax. Many of the nation's heavy spenders, who kept the big nightclubs and the Florida hotels open, used expense-account dollars, which was still fun--but not quite in the same old, free and purposeless way.

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