Date 21 January 1944
Author Stanley Surrey
Title Simplification of Income Tax
Description Staff memo, Division of Tax Research, U.S. Treasury Department
Location Box 51; Individual Taxpayers -- General; Records of the Office of Tax Analysis/Division of Tax Research; General Records of the Department of the Treasury, Record Group 56; National Archives, College Park, MD.

January 21, 1944

To: Mr. Sullivan
Mr. Paul
Mr. Gaston
Mr. Blough

From: Mr. Surrey

SUBJECT: Simplification of Income Tax

Congressman Carlson plans to introduce in the next few days a bill simplifying the income tax. I understand Congressman Robertson is expecting to do the same in the near future.

In view of these Congressional steps we should consider the desirability of the Secretary's announcing, presumably at a press conference, a rough simplification program. Most of the matters that will be in the bill above mentioned are matters which would also be in our program. Consequently, is it desirable that as a program they first emanate from the Department.

The Secretary could welcome Congressional desire for simplification, offer all cooperation, and announce a five point simplification program enumerating the principal matters which he thinks should be considered by the Congress and on which the Department is working. These five points could be:

1. Complete integration of all individual income taxes -- so that we have on individual income tax, with one set of exemptions and one rate schedule.

2. Elimination of returns wherever feasible for those classes of taxpayers fully covered by withholding at source.

3. Improvement of the withholding system, through graduated withholding and closer approximation of final tax liability through refinements in the withholding rates and exemptions and in the withholding tables.

4. Where returns are still needed, simplification of those returns in the light of the above statutory changes, with special attention to simplified returns for particular groups of taxpayers such as farmers.

5. Improvement of the estimated system of current tax payment.

The Secretary night also state that after simplification is achieved for the individual income tax, attention should be immediately directed toward simplification of the corporate taxes.