Wilbur Mills on Taxes and Spending

Since the U.S. Constitution prescribes that "all Bills for raising Revenue shall originate in the House of Representatives," the key man in writing tax laws is the chairman of the House Committee on Ways and Means, which handles all revenue-raising legislation. He has a pervasive influence on Government spending as well, since he can insist on budget adjustments as the price of any new tax measure. For eleven years that chairman has been Arkansas' Wilbur Daigh Mills, now 59. His economic sophistication and political acumen have made his word law with his committee members and the whole House. President Nixon has called for re-examination of all U.S. tax policy, and Mills will be the congressional arbiter of any changes. Mills, who rarely gives on-the-record interviews, agreed to sit down for an examination of his current views on issues with TIME Congressional Correspondent Neil MacNeil. Mills' tour of the fiscal horizon:

TAX REFORM. To Mills, the ideal tax law is simple and brief--but the difficulty of writing equitable tax measures under political pressure makes achieving that ideal impossible. "We want to make as many reforms as we think we can pass through the Congress. People are becoming more concerned. As more people enjoy higher incomes and thus pay more taxes, they become more concerned about how they are treated in relation to other people under the law." He calls the present code "patchwork," but he foresees no basic rewrite this year. "We are only looking at some 17 or 18 specific areas which give different treatment of income from that which is normally applied." Among them: the oil-depletion allowance, tax-free interest on municipal bonds, and capital-gains rates that are lower than ordinary income tax. However, he does not intend to reconsider the provision that allows income splitting between husband and wife.

Mills continued: "When I talk about tax reform, I am trying to establish greater equity in the law, greater simplification of the law, greater neutrality in its effect upon business decisions. I am trying to make it easier to administer, and, from the taxpayer's point of view, easier to comply with." He added: "Anybody who enjoys some preferential treatment should be required to come to the Congress periodically and make his case before the public." -

THE TAX SURCHARGE. The chairman sees no escape from continuing the levy. If Lyndon Johnson and Richard Nixon had not agreed in January to extend the 10% income tax surcharge beyond June 30, said Mills, "President Nixon would have had, within 30 days of taking office, a very intolerable situation. We possibly could have been back even further than we were in the fall of 1967, when people began to doubt our dollar, when people began to wonder whether or not we were being good stewards of our trust. Had its extension not been recommended, in my opinion, you would have had a new burst of inflation."

SHORT-TERM TAX CHANGES. He

is against the idea that the President should have discretionary power to adjust tax rates in order to deflate or reflate the economy over short periods. "In the first place, people are entitled to be heard when taxes are to be increased. I don't know any place in the White House where the President could have a hearing room big enough to hear those who would want to discuss increases in taxes. But the main thing in my mind is that I just don't feel that taxes can be raised and lowered, season by season, or that they should be, to accomplish those short-run objectives. I have spoken many times on this idea of using the tax law to bring about short-run changes in the economy, lowering and raising the hemline of taxation, as dresses are lowered and raised."

SOCIAL SECURITY BENEFITS. Although Richard Nixon proposed in the 1968 campaign that benefits should automatically increase with rises in the cost of living, Mills is skeptical: "We no sooner passed the Social Security Act of 1967, increasing benefits, than inflation is allowed to get to such an extent as to practically wipe out the increases. There are those who have said that the social security benefits should be related to and geared to cost of living increases. I have never favored that."

Mills' objection is that social security fund receipts would not necessarily keep up with payments. But, he said, "I think Congress should take a look to see what the situation is since we have had this inflation. Bear in mind that about 70% of the people who receive social security checks have no other income than the social security payment."

VIET NAM AND SPENDING. Mills believes that the U.S. cannot undertake major new programs at home until the war is over: "I think the greatest problem that faces us right now is to get this war over in Viet Nam as quickly as we can, and get out from under the burdens that are placed on us in the sacrifice of men as well as the expenditure of dollars over there. I will feel a lot more confident about the whole situation and about the attitude of the American people and their confidence in the future when that is over. But until it is over, I think we are going to have to restrain our appetites for the enlargement of programs and the establishment of new programs."

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