Simpler taxes suggested by president

Before I forget, I ought to tell you about a precious remark I came on the other day. This is the time of the year when schools and colleges are, as we used to say in England, breaking up. In America they don't break up, they hold their graduation ceremonies and they don't put on a school play, they offer the spring presentation.

Well, at such a presentation, which was being done at a private school here – I ought to say that it was a kindergarten performance – a tiny tot of a boy jumped on stage dressed as a rabbit. That was all he had to do. Look and move, if possible, like a rabbit. His mother was heard to turn to a friend and whisper, not without pride, 'He's been given a non-verbal role'.

This has nothing to do with anything else on my mind, but I thought I ought not to let the occasion pass to console any listening parents whose children, performing in the school play, discover that their tot, too, has been given a non-verbal role.

Well, if there's one place in America where you'd be right in saying that a non-verbal role was fatal to success, it is the White House, but though we now think of a president as a man perpetually preaching to the people, it's only since the invention of radio that this has been so. The first American president ever to be heard over the radio was a crabbed little New Englander, Calvin Coolidge, who looked, Mrs Alice Roosevelt Longworth, Teddy Roosevelt's daughter, said, 'looked as if he had been weaned on a pickle' – a sour-faced, cagey lawyer and one proud to be known as a man of few words.

But, as I hinted, the day came when he would have to face – indeed, to initiate – the presidential uses of the radio. He was on a visit to California and at the end of it he was to take the train in Los Angeles, in the nearby town of Glendale in those days, and he'd been warned that the crowd gathered to see him off would include a crew, so-called, and a man holding the marvellous new invention known as a microphone.

The newspapers, of course, played up this historic event. For the first time, the great mass of citizens would actually hear the voice of their president. The moment arrived. The old train was getting up steam, a great crowd pressed around the platform. There was a crew doing things with wires or cables or some such spaghetti and there was a man, dithering with pride, holding the microphone and, on a signal, bellowing, 'And here, ladies and gentlemen of this great listening audience, for the first time in history, a President of the United States will deliver over the radio a message to the American people! Mr President!'.

Coolidge leaned into the microphone and said, 'Goodbye!' and climbed aboard. Today, he would thereby lose several million votes.

Since Roosevelt, there's been no going back. He was the first to use the radio ceaselessly, greatly riling Congress by talking over their heads directly to the people, calling them always, 'My friends'. He was known as a great speaker, a father in the home, a man with a supreme gift of the gab and, since Roosevelt, there has been no president – not Truman, not Eisenhower or Kennedy or Nixon or Ford or Carter – no president who has had and exploited this gift, until Ronald Reagan who has adapted the same gift of intimacy, of taking the whole people into his confidence, of talking with barely a hint of jargon, talking naturally, wryly, sadly, cheerfully, in an easy idiom.

We don't, today, call him a great speaker. He's called the great communicator and love him or hate him, so he is.

Well, this week, the president did what he does best. He went on television and talked to the people about the one topic that is always at the back of their minds when it isn't at the front. Taxes. And the talk on Tuesday night is only the beginning. The president is going to travel all over the country now and then again, when Congress reassembles in the late summer, he means to keep up, like a reborn Tom Paine, the speechifying and talking to people in their home towns about what he calls the second American Revolution.

This title is not quite so high-flown as it sounds. The other night, the president was quick to draw the comparison with the conditions that provoked the first revolution, that of the British colonies against the mother country. 'The first American Revolution,' the president said, 'was sparked by an unshakeable conviction – taxation without representation is tyranny.' For once, Mr Reagan was exactly right and the colonies finally did revolt when they were required to pay taxes to a government in which they had no say, no standing, no representatives.

Mr Reagan proposes to start a second revolt against the tax system which, to be precise, has been with us in all its maddening and niggling complications since, at the latest, the Second World War – a tax system he declares to be unwise, unwanted and unfair.

Four years ago, Mr Reagan's biographer who had watched him during his years as governor of California, remarked by way of a warning to those who were inclined to underestimate the new president, 'he will change the nature of the political discourse'.

Well, that, for better or worse, he has done and never more so than last Tuesday night. For years and years – for 40 years anyway – the cleverest politicians, the most learned economists, the most resounding demagogues, the head-shaking bankers have been saying that the American tax system was probably the most complex in the world but, as Mark Twain said about the weather, everybody complains about it but nobody does anything.

Well, Mr Reagan has a plan, a system, he says, where more than half of us would not even have to fill out a return. You would simply send in a cheque amounting to the percentage of tax set by the government for people in your income bracket and that would be the end of it. The president remarked, correctly, that Albert Einstein had to get help in filling in the enormous form that we have all to complete and send in by the fifteenth of every April, the notorious form 1040.

Now in 1969 there was a reform in the tax law. Form 1040 was made simpler. Page after page of the simplified form 1040 is clotted with examples of reformed lucid prose and I'm reading not from section one, but from section 509. It says, 'For purposes of paragraph three, an organisation described in section 501 C, sub paragraphs 4, 5 or 6, which would be described in paragraph two if it were an organisation described in section 501 C 3...'

I will not complete the sentence and say what happens to this unfortunate organisation. All I know about is that it would retain not one, but a team of tax accountants, each of whom would separately compute the firm's taxes, all of whom would then go into a huddle to try and arrive at the same figure.

For a modest journalist of my close acquaintance with three or four sources of income, I can only say it takes normally about two months of arithmetic and any consultations with the accountant before a wad of papers is dropped on his desk and he can spend a week or more arriving at what the man has to pay. The accountant's burden has been lightened in recent years by the magic of the computer. All emerging miscalculations today can be attributed not to human, but to computer, error.

So, what hath Ronald wrought? Certainly the most ambitious, the most audacious, single act of his presidency. To begin with, all families earning no more than $12,000 a year – that's what, say, £9,500 – would be considered too poor to pay any taxes at all and would be dropped from the rolls. Next category, couple earning up to $29,000 a year will pay only 15 per cent tax and if you earn between $29,000 and $70,000 – say, £50,000 – you would pay 25 per cent back in taxes. And above $70,000, even if you earn a couple of million, you'd pay 35 per cent back. That's the top rate.

Now this is all earned income. The top rate is now 50 per cent. As for unearned income and big business, Mr Reagan got off the outrageous thought – very peculiar certainly for a Republican – that his main aim is to reduce tax burdens on working people and close the loopholes that benefit a privileged few, that ordinary people pay too much because a few – he mentioned the oil and gas industries – don't pay enough.

Now this has been a theme song of the Democrats for 40 years but they've not turned it into law. So, the most influential Democrat in Congress where taxes are concerned, the chairman of the House Ways and Means Committee, could only gasp in admiration. 'For once,' he said, 'it's a Republican President who's bucking his party's tradition as the protector of big business and the wealthy.' Senator Dole, the Republican leader in the Senate, called it 'a noble beginning'.

There are many reservations and more than 22 catches in this simple, noble plan and I don't want to spoil the symmetry of it by noticing them now. It's obvious why the House, even with a large Democratic majority, which represents small constituencies, looks favourably for once on the president and why the Senate which, even with a slight Republican majority, represents 50 large constituencies, namely the states which prosper or fail by the success of many large corporations, why the Senate should be more suspicious of the plan.

But, on the whole, and because the president's plan would ease the life of poor people and middle-class people and put the screws on the rich corporations, he has seized, for now, anyway, the imagination of ordinary people, which is what all presidents yearn and pray to do.

This transcript was typed from a recording of the original BBC broadcast (© BBC) and not copied from an original script. Because of the risk of mishearing, the BBC cannot vouch for its complete accuracy.

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