Tax Reform Pressures

March 26, 1969

Report Outline
Proposals for Federal Tax Changes
Process of Enacting Tax Legislation
Questions Involved in Proposed Reforms
Special Focus

Proposals for Federal Tax Changes

Warning of Taxpayer Revolt Against Inequities

Around 117 million Americans are in the process of preparing their federal income tax returns for filing by April 15, a mass compliance that was believed impossible only a few decades ago and is still the envy of most of the world. Taxpaying is perhaps the best-known duty of citizenship. Though grumbling with Benjamin Franklin about “nothing is certain save death and taxes,” a majority of Americans have come to agree with the late Justice Oliver Wendell Holmes that taxes are “what we pay for civilized society.” Collection of 97 per cent of all federal taxes without coercion has been attributed to a taxpayer belief that the tax system, if not perfect, is basically fair.

That belief is being eroded now, public officials have begun to say, by a growing awareness of flaws in the system—an awareness nurtured by the upward movement of taxes at all levels of government. “We face the possibility of a taxpayer revolt if we do not soon make major reforms in our income taxes,” Joseph W. Barr, Secretary of the Treasury in the last few weeks of the Johnson administration, told the Joint Economic Committee of Congress on Jan. 17. Barr testified that in 1967 there were 155 individuals with incomes of more than $200,000 “who paid the U. S. government not one cent of taxes.” Twenty-one of them had incomes of more than $1 million.

They were not tax evaders but tax avoiders, those who manage to escape taxation quite legally because they or their lawyers and accountants have mastered the intricacies of the bulky and complex Internal Revenue Code of 1954, the nation's basic tax law. Congressional testimony and Treasury Department studies are replete with examples of rich widows who put their fortunes into tax-exempt state and local bonds and never have to file a federal tax return; of city dwellers who deduct large losses on hobby farms from their taxable income; of real estate entrepreneurs operating on borrowed money, taking tax deductions on interest costs, building depreciation and other tax writeoffs to the point that deductions exceed taxable income.

ISSUE TRACKER for Related Reports
Feb. 07, 2020  Hidden Money
Jun. 28, 2013  Internet Shopping
Jan. 16, 1998  IRS Reform
Mar. 22, 1996  Tax Reform
Apr. 06, 1990  How Fair Is the Nation's Tax Burden?
Aug. 28, 1987  Taxing Business Services
Oct. 17, 1986  Tax Reform In The States
Sep. 28, 1984  Tax Debate: 1984 Election and Beyond
Mar. 19, 1982  Tax-Exemption Controversy
May 19, 1978  Property Tax Relief
Apr. 07, 1978  Tax Shelters and Reform
Feb. 10, 1971  Property Tax Reform
Mar. 26, 1969  Tax Reform Pressures
Mar. 24, 1965  Excise Tax Cuts and the Economy
Feb. 15, 1961  Flexible Taxation
Apr. 02, 1959  State Tax Problems
Apr. 23, 1958  Tax Reduction, 1958
Aug. 14, 1957  Fast Tax Write-Offs
Apr. 10, 1957  Federal Payments in Lieu of Taxes
Sep. 12, 1956  Corporation Profits and Taxes in Prosperity
Mar. 16, 1954  Shares in Tax Relief
Nov. 21, 1953  Revision of Excise Taxes
Mar. 19, 1953  Federal-State Tax Relations
Oct. 01, 1952  European Taxes and Tax Evasion
Nov. 03, 1950  Excess Profits Tax
Feb. 01, 1950  Tax Loopholes
Jun. 04, 1949  Excise Taxes
Oct. 27, 1948  Postwar Sales Taxes
Aug. 29, 1947  Taxation of Family Income
Apr. 09, 1947  Income Tax Relief
Jan. 11, 1946  Taxation of Cooperatives
Oct. 16, 1945  Federal Taxes on Business
May 08, 1944  Postwar Taxes
Sep. 20, 1943  Sales Taxes
Dec. 05, 1941  New Taxes for Defense
Apr. 05, 1941  Taxation for National Defense
Feb. 28, 1941  Taxation of Alcoholic Beverages
Jan. 11, 1941  Exemptions from Taxation
Dec. 04, 1940  Federal Taxes and Defense Financing
Feb. 01, 1940  Sharing of Tax Revenues
Feb. 02, 1939  Turnover Taxes in the States
Nov. 05, 1937  Broadening of the Income-Tax Base
Jun. 17, 1937  Exemptions from Income Taxation
Apr. 05, 1937  Coordination of Federal and State Tax Systems
Dec. 19, 1936  Revision of Federal Tax on Capital Gains
Nov. 02, 1936  State Taxation of Natural Resources
May 26, 1936  Assessment of Property for Taxation
Apr. 17, 1936  Federal Taxes on Consumption
Mar. 19, 1936  Taxation of Undistributed Corporate Profits
Dec. 17, 1935  Reduction of Tax Burdens on Real Estate
Oct. 21, 1935  Tax Delinquency in the United States
May 21, 1935  Comparative Tax Burdens in America and Britain
Feb. 01, 1935  Federal Taxation of Corporations
Nov. 27, 1934  Elimination of Conflicts in Taxation
Jul. 25, 1933  Taxation of Excess Profits
Jan. 25, 1933  Tax Burdens and Tax-Free Securities
Nov. 23, 1932  The Beer Tax and the Sales Tax
Dec. 19, 1931  Sales Taxes: Federal, State, and Foreign
Sep. 18, 1931  Death Taxes and the Concentration of Wealth
Mar. 18, 1931  Federal Taxation of Large Incomes
Jan. 10, 1931  Taxation of Capital Gains
Nov. 09, 1929  Federal Tax Reduction-1930
Aug. 08, 1927  Federal Tax Reduction—1928
Sep. 27, 1926  Tax Reduction and the Public Debt
Jan. 16, 1926  Taxation of Estates and Inheritances
Nov. 07, 1925  Federal Taxation of Small Incomes
Nov. 28, 1924  Social, Fiscal and Legal Aspects of the Inheritance Tax
Apr. 07, 1924  Causes and Effects of the Tax Return Blockade
Dec. 12, 1923  Tax Exempt Securities
Dec. 10, 1923  Taxation
Tax Reform