Our tax system -- Time for reappraisal;

              Our Tax System—Time for Reappraisal
by THOMAS J. GRAVES Partner, Executive Office
Presented before The Tax Society of New York University, New York City—November 1962
THE DIVERSITY of your program today is a good indication of the complexity of our tax structure and of the many conflicting in­terests
that must be resolved in measuring and dividing available sources of tax revenue. You will hear talks on several of the important recent changes in the Federal income tax laws, changes brought about through court decisions, as in the taxation of estates and trusts, legislative changes, and changes in administrative attitude, such as the introduction of the new guidelines for testing depreciation al­lowances.
While the changes made this year in the Federal tax system may seem at first glance to be unusually broad in their impact, they are only surface indications of the ever-sharpening conflicts among the special interests of different taxpayer groups and between tax­payers
themselves and the tax-collecting bodies of the Government.
CONFLICTS OF TAX LAWS
The history of the Revenue Act of 1962 is a good example of the impact of the social, political, and economic forces that tend to make our tax laws complex because of the difficulty of resolving their con­flicts.
On April 20, 1961 when the President sent his Tax Message to Congress he sought stimulation for a lagging economy through the investment tax credit. This was intended as an aid to business and it probably was a great shock to those who proposed it when they learned that many businessmen would prefer not to receive this par­ticular
gift but would rather shop for another one instead. In the same message the President sought payment for the gift through a series of changes that would close what he regarded as loopholes. Perhaps the public was surprised by the controversy that followed. You should not have been. It was evident at the time that the package requested was unusually full of items that would be regarded by many taxpayers as unnecessary and unfair. Congress did not give the Presi­dent
some of what he asked, such as withholding on dividends and interest, and some of his proposals were changed drastically. The result is more of an undistinguished compromise than a great victory,
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