All Commentary
Friday, March 1, 1963

The Just and the Unjust

Reprinted by permission from The Wall Street Journal, January 8, 1963.

We guess we don’t run in the right social circles.

For years we have been reading those books about wild living in the suburbs and wondering some­what plaintively why the excite­ment seems to pass us by. In years of suburban living the wildest shock to the even tenor of our do­mesticity was the day the dog drank up the cocktails and bit the mayor. It was weeks before we were forgiven.

For almost as long, we’ve been reading about all this notorious high-living on the expense account, boats and all that, and groaning over what we seem to have missed. After a quarter century in that den of iniquity, Wall Street, no one has tempted our journalistic virtue with even so much as a night at a hunting lodge, much less a sea-going voyage. Where, indeed, are all those expense-ac­count yachts?

True, we aren’t without sin, as defined in the new dogma of the Internal Revenue Service. We suf­fer business luncheons dreadfully often; and when we turn in the voucher, we don’t deduct the $1.25 we would have spent anyway for the Blue Plate special. A man is entitled to some recompense for punishment in line of duty.

When business takes us to Pe­oria or Dubuque, as it does all too often, we take an aperitif before dinner, choose the steak over the chicken-a-la-king and sometimes splurge on the movies, charging the lot to the stockholders. If it weren’t for their business, we wouldn’t be there at all, and frank­ly we have better steaks at home.

Moreover, the children being more or less at the age of discre­tion, we have lately taken our wife along on some trips. We haven’t persuaded the curmudg­eonly auditor to okay her expenses, but not long ago we drove to Washington on legitimate business (if talking to a Senator is legiti­mate), and our wife rode along in the car. Even that baleful auditor didn’t ask us to reimburse the company for the equivalent price of her bus ticket.

In the Line of Duty

Give or take a few details, this is not unlike the situation of thousands of businessmen in a country where men at work are ceaselessly traveling to and fro. The door-to-door salesman and the flying corporate executive are brothers under the skin; they are working also when they pass the time of day with the lady at the door or the business acquaintance across the luncheon table. Some­times the smartest business is not to talk “business” at all but to be friendly, interested, to listen and to learn. Only ignorant and petty minds could imagine that the “free” lunch is all beer and skittles.

But now it turns out that all this is under the suspicion of un­dermining the public morality and the solvency of the U.S. Treasury. In any event the government is going to treat all the people as crooks until proven otherwise.

This suspicion of malefaction flows from every word of the new regulations on record-keeping, pe­dantic in language and picayune in detail, drawn up by the Internal Revenue Service.

Hereafter you must account to the government not only for your yacht but the beer you buy a busi­ness acquaintance. The documents for any “entertainment,” no mat­ter how trivial, must include the amount, date, place by name and address, type (martini or ham sandwich?), explanation of the “benefit” to be returned for this bounty, the name of the recipient and sufficient documentation to ex­plain your extravagance to the satisfaction of any revenue agent who subsequently examines your tax report.

And if perchance on a trip you spend more than $25 in any day you must itemize everything else too—the day you left home, day you got back, every telephone call, meal, cup of coffee, taxicab, and bus fare. If you want your books to balance, you’d better even keep track of the postage stamps for the letters to the home office.

The sheer absurdity of this ava­lanche of paper work is only the beginning. The metaphysicians of Mr. Mortimer Caplin’s bureauc­racy have now gone off to mull such esoteric questions as: What, precisely, constitutes a “business meal”? What is the allowable dif­ference in cost between a lunch for a life insurance prospect ($5,000 policy) and the prospect for anelectric dynamo ($5,000,000 sale)? Can you also buy lunch for the prospect’s wife, or do you suggest she go eat in the drugstore? What if your own wife is along, too—do you leave her back in the hotel room to munch a hamburger and watch television?

As ridiculous as these questions sound, they are precisely the sort of thing that must now be decided upon at the highest levels, and Mr. Caplin confesses—quite under­standably, we think—that it will be some weeks before we can ex­pect any official enlightenment. It has never been easy to decide how many angels can dance on the head of a pin.

Integrity of All Insulted

Yet it is neither the absurdity of the paperwork nor the ridicu­lousness of the metaphysics that is the true evil.

Here is a situation in which the government is, no doubt about it, confronted with a problem. Some people do hide yachts in expense accounts, just as some do hide mis­behavior in the suburbs, and the government has the power to deal with the real tax cheaters. But the vast majority of the people every­where lead quiet, placid, and up­right lives; and the vast majority of those whose taxes support the government give an honest ac­counting of their affairs.

Yet here we use the majesty of the law to treat every taxpayer as a potential cheater because pin­head minds can think of no other way; the integrity of all must be insulted, and the conduct of their affairs made insufferable because of the sins of the few.

Now completely apart from this question of expense accounts, this is a philosophy of government which is evil in itself. We once had an example of this when, to stop a few people from drinking too much, we adopted prohibition which treated all men as potential alcoholics. Surely, the results have not left our memory.

The results of this noble experi­ment can also be foreseen. These new rules will give trouble only to honest men. The real “operator”—the man who is really out to cheat on his taxes—can drive a truck through them.

The smart lawyers are already figuring out the perfectly legal loopholes; beyond that, those with larceny in their hearts will not be disturbed because they will show records, receipts, and paper ac­counts by the carload. As sure as the sun rises tomorrow, today’s rules will have to be followed to­morrow by new rules upon new rules “tightening” the rules.

And while all this is going on, the honest man—the man who takes a business trip to do an hon­est job for his company and with no desire to cheat either his com­pany or his country—that man will see himself not merely laden with burdensome paperwork but with the fear that everything he does is under suspicion.

Because he honestly tries to keep honest records, all the records will be there and he can be called up a year later, two years later, and find that what he did in good faith is adjudged wrong by some petty bureaucrat imbued with the idea that any expense account must conceal some wickedness. The smart operator will have his lawyers; the little taxpayer will be helpless against the insolence of office.

We submit that to order the public affairs in this manner is an affront to the public morality, just as it would be for the state to require of every citizen a de­tailed accounting of his home­coming-and-going because some men cheat. That government gov­erns illy which can find no other way to deal with malef actors than to maltreat all of its citizens, the just and the unjust alike.