WILBUR MILLS AND FANNE FOX

Nobody likes the Internal Revenue Code. It is burdensome, complicated, and difficult to understand. The Code and the regulations contain more than 44,000 pages and 5.5 million words.

The only person I ever met who thoroughly understood the details of the Internal Revenue Code was Representative Wilbur Mills, who was Chairman of the House Ways and Means Committee. In 1974 he was embarrassed by an incident involving Fanne Fox, a stripper, otherwise known as "The Argentine Firecracker," near the District of Columbia Tidal Basin at 2 A.M. one morning.

The stress of dealing with tax and tariff bills may have had something to do with Mr. Mill's interaction with Ms. Fox. This regrettable incident was hurtful to Mr. Mill's career. On the other hand, maybe that is not a bad way to go.

H.R. 982 the "Tax Code Termination Act" was filed last month. It provides that the Internal Revenue Code of 1986, now in effect, will sunset on December 31, 2012. A new tax code must be enacted, and the bill states that "The Congress hereby declares that any new Federal tax system should be a simple and fair system that --

(1) applies a low rate to all Americans;

(2) provides tax relief for working Americans;

(3) protects the rights of taxpayers and reduces tax collection abuses;

(4) eliminates the bias against savings and investment;

(5) promotes economic growth and job creation; and

(6) does not penalize marriage or families."

If such a law could be drafted, I am sure that it would be adopted immediately. The problem is that the tax law is not that simple.

Section 61 of the Code provides that "Except as otherwise provided in this subtitle gross income means all income from whatever source derived..." "Gross income means all income from whatever source derived" takes nine words. "Otherwise provided in this subtitle" involves thousands of pages and millions of words of explanations of deductions, special treatments, and other material.

I once saw a Christmas tree with so many ornaments that the branches were invisible. That is the case with the tax law. In later Articles, I will discuss some of the problems we confront in trying to simplify the Code.