National Affairs: Treasury Proposal

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TREASURY

A bald-browed beagle baying on the trail of income tax evaders was Henry Morgenthau Jr. last week. The Acting Secretary of the Treasury announced that henceforth all important cases brought before the Board of Tax Appeals would be inspected by him personally. From now on, he continued, the Treasury would go to law to recover tax deficiencies instead of accepting compromises out of court.

First victim of the Treasury's crackdown was a man whose trial had been eagerly sought by the Department of Justice, under the personal orders of the U. S. President. Though Charles Edwin Mitchell was acquitted after a haggering six-weeks trial for conspiring to defraud the Government of $850,000 worth of income taxes, the Treasury last week maintained that Mr. Mitchell might not be a conspirator, but he still owed the Government money. Reportedly, the Treasury turned down an offer of a $100,000 settlement.

Day later Acting Secretary Morgenthau appeared before the House Ways & Means Committee, which since last summer has been casting about for ways & means of constructing a non-leaking income tax law. The fat document which Mr. Morgenthau. adjusting his pince-nez, rose to read the committee had been prepared for him by his tax man, Professor Roswell Magill of Columbia. Mr. Morgenthau's professor generally approved the first draft of the committee's tax plan (TIME, Dec. 18). But he had some ideas of his own. Most popular was reduction of levies on earned income. Most novel proposal was to make compulsory a single joint return by man & wife. This, estimated Professor Magill, would add $40,000,000 to the U. S. income, and would put a stop to the practice whereby a husband or wife transfers taxable assets to the spouse with a lower income to avoid the heavy surtaxes in the high brackets. Again Banker Mitchell was made a horrid example.