Early in the Congressional campaigns of last Autumn, a Republican from Minnesota promised that his party, if elected, would proceed to reduce income taxes by a flat twenty percent "across the board." A fellow partisan from Massachusetts joined the chorus, pledging his own efforts to a slash of one-fifth. Today, four months later, Harold Knutson of Minnesota is Chairman of the House Ways and Means Committee, and Joe martin of Massachusetts wields the Speaker's gavel. The tax-reduction will stands at the head of the legislative calendar as House Resolution Number one.

The arguments pro and con have ranged far afield into discussions of budgetary balancing, fiscal policy, and inflationary effects, but none of the proponents of tax reform have examined HRI at its most vulnerable point. Despite the apparent justice of an equiproportional tax cut for everybody, the bill proves on closer examination to be a vicious example of regressive tax relief. In effect, the brainchild of Messrs. Knutson and Martin gives little aid to the lower income brackets and reserves the plums for the well-to-do.

Official Treasury data show that the current tax on a married $40-a-week workman is $285. Under HRI, he would pay $228 a year to the Bureau of Internal Revenue. Net annual income after taxes, or "keep-home pay, would increase under HRI from $1715 to $1772. The net effect for the $200-a-year man is therefore an income boost of slightly more than two and a half percent. As gross income rises, the kickback under HRI rises not only in absolute terms, but percentage-wise as well. At $5000 a year, the net gain in income would be somewhat less than four percent. At $10,000 it becomes almost six percent.

In the Golden Horseshoe brackets the harvest reaches bumper proportions. For the taxpayer with $100,000 of gross income, HRI will prove a net income boost of over twenty-five percent. The fortunate few who earn a half million every year will reap savings of more than seventy percent of current net income. The relative gain at the $500,000 level reaches almost thirty times the "relief" afforded the average laborer, even though the tax cut under the proposed bill falls from twenty percent to ten and a half percent for income in excess of $302,000.

No particular mystery attaches to these figures. Any flat percentage cut in a progressive tax must, by simple arithmetic, lead to a regressive result in terms of income. Such anomalous consequences, utterly contradictory to the general principle of progressive taxes, can be avoided either by reducing the tax burden via higher exemptions, or by providing for larger percentage tax reductions in the lower brackets. The former course has been advocated by Representative Engel, who urged that exemptions be doubled. As yet, no Congressman has argued for a graduated cut, but its political advantages are so obvious and its economic implications so easily defensible that someone is certain to crop up with the idea before the argument becomes much warmer. With the GOP in power, some sort of tax relief is in the cards; the main job new consists in fixing a wary eye on the dealer.