Mixed-up Economics

...That Carson omits this vital development is a sign of a curious lack of engagement with his subject that is uncharacteristic of the author of The Social History of Bourbon and Cornflake Crusade...

...Carson does not make this argument, nor the more sophisticated modern version that present tax rates on corporations and upper-income individuals are inhibiting capital formation, shrinking disposable income and weakening incentive...

...What is more important, he raises no objection to current expenditures, and no brief for lowering taxes makes sense unless it proposes a corresponding cut in government functions...

...For one thing, Carson admits that Americans pay a substantially smaller portion of their earnings in taxes than do the citizens of any other major industrial nation...

...by Macaulay and Thomas Jefferson in the 19th...

...It would have been understood in this extended sense by such literary figures of the 17th century as Sir Thomas Browne, John Dryden, and Andrew Marvell...

...Possibly the object is to confuse us so that we will not become smug about our intelligence...

...As if that were not enough to muddy the waters, he reminds us of what Justice Oliver Wendell Holmes had to say on the subject: "Taxes are what we pay for civilized society...

...There is little hard evidence," Carson notes, "to support the view that income taxation has endangered the wealth-formation process, nor has it measurably curtailed the buying power that our capitalistic society generates...

...Combined with this you-are-there style is a simplification of the serious...

...on April 6, 1917, and in Great Neck, Long Island, George M. Cohan scanned the day's headlines, stepped to the piano, and wrote 'Over There,' his great war song with the stirring climax...

...It was the song of songs of World War I, and Congress awarded Cohan a gold medal...

...A congressman in 1895, orating on "the songs of birds" that will greet the passage of the income tax, gets a bizarre rebuke from the writer, who comments on the "striking degree to which congressional eloquence rested on the pathetic fallacy—the ascription of human feelings to the natural world...

...Until medical pioneers discover a cure for logorrhea, it remains for editors with their comparatively primitive tools to save afflicted authors, and they would appear to be in short supply at Houghton-Mifflin...

...The Golden Egg does not even mention the Kennedy-Johnson $11-billion tax cut enacted in 1964...

...offer popular fallacies and trite humor in place of mature analysis...

...Finally, the author of The Golden Egg does go on about the obvious...

...Quoting Theodore Roosevelt's memorable crack that William McKinley had the backbone of a "chocolate eclair," Carson chides Roosevelt for—of all things—mixing his metaphors...

...Carson, for example, is generous with this sort of information: "The American declaration of war came at 3:00 a.m...

...Consequently, his book stops where it might have been of some use, if only because Randolph Paul's outstanding Taxation in the United States (1954) also ends in 1953...

...But he ends up, perhaps unwittingly, making a good case for the opposite view...

...Thus he can call the early income tax "a frankly discriminatory class levy" on one page and later contradict himself: "A tax on incomes, therefore, is no more an example of class legislation than is any other tax...

...and we won't come back till it's over Over There...

...history, it lowered the rate on the highest incomes from 91 per cent to 70 per cent, and reduced the 20 per cent the majority paid to 14 per cent...

...In fact, despite his attitude toward taxes, his final chapter explicitly rejects this argument...

...Should that leave you a bit unsteady, Carson rattles on: " 'Loophole' is not a new word...

...Whatever, here is his definition of a tax "loophole": "This useful term in its metaphorical sense is often applied to an ambiguity in the Internal Revenue Code and the Treasury regulations that affords an opportunity for slipping in between the interstices of the code to accomplish a saving in a taxpayer's account with the Federal government...

...Carson reserves his "intellectual labor" for those areas he deems in need of illumination...

...Not the least of Carson's weaknesses is a tendency toward the pedantic...

...Elected officials endorse tax reform in general while fighting for pet loopholes...

...The largest single reduction in U.S...

...An obvious reference to "Aesop's perdurable allegory," as he calls "The Goose that Laid the Golden Egg" story, the title appears to represent the book's theme—presumably that the greedy government is taxing so much of our income, there soon will be no more income to tax...

...The author's first offense is giving a history of the personal income tax such a flip title...

...The confusion reflects the volume's lack of a theoretical spine...

...As for incentives, "For American workers in a less elevated level there are just as good reasons for believing that high taxation spurs them on to greater effort as for supposing the opposite...

...However, these do not include the history of the income tax since 1953, the year his narrative ends...

...Here is a discussion of the capital gains exemption, perhaps the foremost tax loophole: "Tax scholars have long pondered this matter...

...Corporations that boast record earnings to shareholders plead record losses to the Internal Revenue Service and beg Congress to ease their crushing tax burden...

...And people like Gerald Carson, who ought to know better...

...Reviewed by Thomas O'Brien The subject of taxation seems to bring out the worst in people...

...it rests, instead, on a gelatinous bed of attitudes, "colorful" anecdotes, "amusing" sidelights, myths, and conventional prejudices...

...He then entitles his next chapter, "A Class Tax Becomes a Mass Tax...

...Normally upright individuals stoop and scurry for fanciful deductions...

...But the ideal factor for taxing such gains and balancing off losses, with fairness to the whole community, remains elusive despite all the intellectual labor that has been expended upon the subject...

...It was Holmes' contemporary, Republican Secretary of the Treasury Andrew W. Mellon, who put the case for cutting taxes most bluntly: "The prosperity of the middle and upper classes depends on the good fortune and light taxes of the rich...

...The inconsistency between Carson's general outlook and his conclusion is symptomatic of an intellectual flaccidity displayed throughout...