Editorial: Treasury’s efforts to block Ruml Plan are weak, clumsy
The attitude of the Treasury and of some of the important Congressional leaders toward the Ruml Plan is most discouraging. There seems to be considerable basis for the impression that persists in some quarters that responsible government officials are stubbornly fighting this proposal every inch of the way, principally because they did not think of it first.
As a result of the hearings before the House Ways and Means Committee at which Randolph Paul, general counsel of the Treasury, and Beardsley Ruml, banker and businessman and author of the proposal which bears his name, presented their views, there were hints that a compromise might prove the way out for Congress in its present dilemma.
The Treasury, like other opponents of the Ruml Plan, persists in misinterpreting it. Indeed, this pose of not understanding it strikes us as just a device for trying to weaken the plan with the public on the ground that it is needlessly complicated. Also, for this same reason, there is a desperate effort to picture it as a scheme principally to help the rich, whereas actually it is primarily aimed to assist the great mass of medium and small taxpayers who are finding themselves in increasingly desperate financial straits.
The chief error the Treasury and other opponents keep making is to claim that the plan is going to “forgive” a whole year’s taxes, and that the government would lose $10,000,000,000 under it.
As we have pointed out before, the Ruml Plan merely means that the government will change the basis of assessing income taxes so that all will be paying on the current year’s income rather than on last year’s. It is just a case of turning the tax clock ahead for all. The principle involved is thus similar to that of daylight saving.
That the Treasury recognizes the popular sentiment that has lined up back of the Ruml Plan is shown by its modification of its original 100% opposition. Now it expresses a desire to get taxpayers on a pay-as-you-go basis. But not by the Ruml Plan.
Rather than accept such a relatively simple device, the Treasury is floundering around with various proposals to none of which it seems finally committed. Incidentally some of these ideas were effectively spiked by Mr. Ruml in his testimony. The business of paying taxes, on whatever basis, on 1942 income along with those on 1943 income was characterized by him as double taxation that would be an intolerable burden.
Mr. Ruml himself recognized that there would be a few windfall cases of taxpayers who would profit by his plan and he advanced suggestions to meet that situation. He would not have capital gains affected by his plan. And he would provide a special death tax to recover what may be considered windfall because of death.
Such issues can easily be worked out. They are incident to the major purpose of the plan which is to shift the nation over to a businesslike pay-as-you-go basis. Congress should reach its decision as soon as possible for March 15 is approaching rapidly.