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A taxing poem mystery, Chapter 2

May we agree, Watson, that hindsight can make the road ahead easier to navigate? That is, knowing where we are going often requires understanding how we got here. Well then ...

Appointed by President Warren Harding, conservative Republican Andrew Mellon served as Secretary of the Treasury from 1921-1932. He was considered the third richest man in America, behind only John D. Rockefeller and Henry Ford. To balance the budget, Mellon advocated cutting spending and taxes -- the last especially for the rich, who had been avoiding them by buying those "tax exempt securities."

He got his way. The top tax rate fell first from 73 percent to 56 percent in 1923, then to 45 percent in 1924. From 1926 to 1931, it was 25 pewrcent (except for the year of Crash of 1929 when it fell to 24 percent).

(Today's just revised top tax bracket rate of 36.9 percent is still the third lowest since 1932 when it was 63 percent. The highest, 94 percent in 1944.)

The Mellon plan significantly lowered estate taxes as well. Mellon opposed stimulus measures following the crash, urging President Hoover to let the chips fall where they would.

And they certainly did.

Mellon reduced income tax rates also for lower brackets. However, according to a 2005 paper by Professor John W. Lee at William and Mary School of law: "Most workers were exempted from the income tax due to generous personal exemptions, but were heavily burdened by regressive excise taxes, prompting the 'Mellon Ditty.'

"Undersecretary of Treasury Ogden Mills, who had been a Wall Street tax lawyer and member of the House Ways and Means Committee in the early 1920s, pointed out in the 1932 Senate Finance Committee hearings that the real tax burdens were state and local taxes borne by small and moderate income taxpayers."

On the floor of the 65th Congress (Feb. 23, 1924), Georgia Democratic Congressman William C. Langford vehemently protested Mellon's trickle-down proposals.

The congressman rose to remark angrily, "We find the Secretary of the Treasury at one time advocating a sales tax, at another suggesting three cents postage on ordinary letters, and a tax on all checks drawn on banks regardless of their size. At all times we find him urging less taxes for the millionaire profiteer and more for the common folks. So it is most evident that his plan is to tax more and more the poor and to finally relieve entirely the very rich."

Langford then delivered the "Mellon Ditty"

Tax the people, tax with care,/ Tax to help the millionaire;

Tax the farmer; tax his fowl;/ Tax the dog and tax his howl;

Tax his hen and tax her egg; /And let the bloomin' mudsill beg.

Tax them just all you can, /This is, friends, the Mellon plan.

* * *

Tax his pig and tax his squeal,/Tax his boots, run down at heel;

Tax his horses, tax his lands,/Tax his blisters on his hands;

Tax him just all you can;/This is, friends, the Mellon plan.

* * *

Tax his plow and tax his clothes,/Tax his rag that wipes his nose;

Tax his house and tax his bed,/Tax the bald spot on his head;

Tax the ox and tax the ass;/Tax his "Henry," tax the gas;

Tax the road that he must pass/And make him travel o'er the grass;

Tax him just all you can;/This is, friends, the Mellon plan.

* * *

Tax his cow and tax the calf,/Tax him if he dares to laugh;

He is but a common man,/ So tax the cuss just all you can,

This is, friends, the Mellon plan.

* * *

Tax the lab'rer, but be discreet,/Tax him for walking on the street;

Tax his bread and tax his meat,/Tax his shoes clear off his feet.

Tax the pay roll, tax the sale,/Tax all his hard-earned paper kale;

Tax his pipe and tax his smoke,/Teach him government is no joke;

Tax him just a ll you can,/This is, friends, the Mellon plan .

* * *

Tax their coffins, tax their shrouds,/Tax their souls beyond the clouds;

Tax "small" business, tax the shop;/Tax their incomes, tax their stocks;

Tax the living, tax the dead;/Tax the unborn before they're fed;

Tax the water, tax the air,/Tax the sunlight if you dare;

Tax them all, tax them well,/Take it a ll, don't leave a smell;

Tax the good roads, tax the stones,/Tax the farmers, tax their loans,

Kill their credit, raise their rates,/Tax the cities, tax the States;

Save the profiteer his gold,/Tax the poor, tax the old;

Tax them just all you can,/This is, friends, the Mellon plan.

An interesting case, Watson. But is this the end of our story? Decidedly not. But the evening has grown late, and we shall wait upon the morrow.

Bob Hooper is a fourth-generation western Kansan who writes from his home in Bogue.

celtic@ruraltel.net