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The sultan of taxes.

Figuring Out Wilbur D. Mills Was No Easy Task, But For 15 Years He Was A Titanic Force In American Business

Wilbur Daigh Mills was a chameleonic character, appearing, within limits, to be whatever you wanted to see. (His political coalition included most of the Little Rock liberal establishment, along with Conway County Sheriff Marlin Hawkins.)

But whatever facet of the public man you saw, and whether you liked it or didn't, one fact was clear: For at least 15 prosperous years, Mills was a titanic force in American business.

Arguably, he was the last titan in the U.S. House of Representatives, an institution that has declined steadily in both power and prestige since he left office -- perhaps in small part because of the way he left.

That is another story, though, of scandal tarnishing a sterling career and the bittersweet renaissance of a man finding humanity in his dotage.

This one is about what was.

Mills was the last politician with the clout to say, in effect, "You can do that, Mr. President, but we're going to balance the budget."

Fiscal year 1968, when Mills insisted on $6 billion in spending cuts that President Johnson opposed, was the last time the federal government balanced its books.

The grand sultan of taxes. That was the Mills image while he chaired the congressional granddaddy, the House Ways and Means Committee.

To understand what that meant, you have to understand something about the way the House works, and how it worked in the years Mills chaired the committee.

The Constitution requires that all tax legislation originate in the House rather than the Senate. This gives Ways and Means an unparalleled reach and power over much of the principal business of government, which is to determine how much money comes from what sources.

The committee controls a good deal of other important legislation as well, including foreign trade matters and Social Security.

In each area, Mills would leave a significant mark.

Subcommittees have proliferated in Congress since Mills left, but he eliminated them in Ways and Means early in his tenure, and until the trying last year or so of his leadership, none existed below him.

Every amendment to every tax bill was subject to his gavel. He shared the power of the chair with no one.

Committee On Committees

Ways and Means in Mills' day was the de facto committee on committees, assigning work to all Democratic house members. They all owed something to the Ways and Means chairman -- or wanted something from him.

The other key to the committee's strength, and Mills' personal power, was that Ways and Means legislation always was reported under the closed rule. His bills could not be amended on the floor, only in committee. This went for all of the committee's legislation, not just tax bills.

Still, Mills was best known as the sultan of taxes. He did not write the tax code, although his imprint, until the tax "reform" legislation of 1986, was all over the law. What he did was preserve the tax law against disaster, forestalling the economic necessity of reform, which he himself advocated for at least 30 years.

The sultan's reputation, growing eventually to the level of myth, derived largely from one of the real currencies of power -- knowledge.

It is unlikely that during the period of his chairmanship, anyone knew more about the massive tangle of statutes and regulations governing federal taxation than Mills.

It may be that this mastery was one of the impediments to reform. Mills could make the old clunker work, and not just anybody could work on it. A good shade-tree mechanic takes at least as much pride in his vehicle as the manufacturer does.

Mills' own story is that he never had the power to change the law to his liking. He said in his last years that what he always wanted to achieve was fairly radical reform -- a graduated tax with low rates and no exemptions or deductions. Mills said he could have passed it in the House, but he felt it would have failed in the Senate with its Finance Committee dominated by Russell Long of Louisiana.

Mills also admitted, tellingly, that he feared the result of his own plan. With the inexorable tendency of rates to rise, he feared that a plan without loopholes could become confiscatory.

So was that point of view conservative or liberal?

Take your pick, depending on your reading of Mills' motives.

Asked a few years back how he saw himself, Mills replied characteristically in terms of how he thought he was seen by others: "Conservative, but liberal on Social Security, perhaps extremely liberal."

He was, by any reasonable measure, liberal on Social Security. Being a fiscal conservative and a cautious legislator with a commitment to the actuarial soundness of the Social Security system, Mills did not support Medicare before 1965. With Johnson's election, it became clear that he had to support something of the sort. Before the year was out, he scored a clear political coup by forging a consensus on his committee. Mills not only supported the bill, he forced the administration to add Part B, reimbursement for physicians' services. This gave Medicare muscle.

The evident turnaround seemed to surprise many Mills watchers. In fact, Medicare Part B, when it became politically possible, was perfectly consistent with Mills' history and his ideology to the extent that anybody can figure out what it was.

White County Judge

Near the end of his life, asked what his greatest achievement in politics had been, he cited nothing that had occurred during his remarkable 38 years in Congress. His finest hour, he said, came when, as White County judge in the early 1930s, he jawboned local doctors and hospitals into taking care of indigent patients free of charge.

Mills' concern, however genuine, always was wrapped in caution (one element of conservatism) and an almost blind commitment to private enterprise (the other).

Experience showed him what was possible within the constraints of the system and in politics.

It was, in the last few years, the amateurish refusal to recognize the impossible that saddened Mills about the ostensibly conservative program of President Reagan and the continuation of his policies in the Bush administration.

Mills, if he were indeed a cautious conservative, was something else, too.

He was a Democrat.


Had he been consulted by the Republicans trying to live up to the inconsistent campaign promises of 1980, Mills might have told them the story of a letter he received in January 1953 from Robert L. "Muley" Doughton of South Carolina, inveterate chairman of Ways and Means.

Doughton told his protege that the program advanced by the new Republican president, Dwight Eisenhower, consisting of lower taxes, higher military spending and a balanced budget, defied arithmetic.

Doughton was right, of course. Eisenhower was proved wrong, and Mills took a lesson in basic economics he would gladly have shared with anyone willing to listen 30 or 40 years later.

The Spending Freeze

If the Republicans hadn't listened to that story, he might have told another, the one about the big tax cut he pushed through the House, over the wails of the Republican minority, for President Kennedy in 1963. Mills knew, as Reagan's people later knew, that a tax cut would have to be accompanied by spending curbs to make economic sense.

What he also knew was that there was only one practical, possible way to do it -- a spending freeze.

"Cuts take time," Mills said. "You have to figure out where you want to cut. You have to start with a spending freeze."

So the spending freeze comes first, then a spending cut and finally a tax cut.

It is at least a three-year program, as Mills saw it.

Spending freezes, although proposed in the past decade, didn't work because freezes inspired deep fears, mostly at 1600 Pennsylvania Ave. The administration, until after the collapse of the Soviet Union, dogmatically obstructed any freeze in defense spending.

Supply-side economists desperately feared freezing in place the domestic programs they wanted to destroy.

"I thought supply-side was stupid, unbelievably," Mills said. "You see where it got us deficitwise."

The idea that a tax cut pays for itself, Mills contended, is "ludicrous," historically without foundation.

If it does pay for itself, the repayment takes time, and that is why a freeze and cut must be achieved first.

"Growth in the economy, without cuts in spending, will never cause the two lines |spending and revenues~ to intersect because growth in spending will always rise faster than the economy," Mills said. "All you have to do is look at history to understand that."

Now a part of history himself, Mills bears a little more looking at. He was a hard character to grasp, particularly as a moral creature. Not that there's any point, let alone virtue, in trying to judge whether Mills was a good man or bad, but there is a good deal to learn by figuring out the kind of character who can torque the levers of power the way Mills did.

A.P. Mills

Perhaps the key to understanding Wilbur Mills, particularly with respect to business and his affinity for it, is Mills' father, a remarkable fellow by the name of A.P. Mills.

A teacher who started a country store in scruffy Kensett in White County, the elder Mills eventually became a partner in a bank. Much of his lending, however, was done out of his pocket, so to speak, in the store.

During the Great Depression, when dozens of farmers owed him money and couldn't pay, Mills forgave all the debt and started over, turning money into moral debt. He wound up owning the Bank of Kensett outright, as well as a good deal of farmland he didn't really want.

He became one of the legendary minor barons of Southern politics, boss of his part of White County, a counterpart to the precinct bosses of, say, Tip O'Neill's Boston.

Wilbur Mills grew up on the twin stairways of business and politics, standing on a stool behind a teller's window until he was tall enough to see over the counter and counting votes at precinct boxes to tally the inevitable Democratic victories.

His accomplishments in public life so far outstripped those of his father, it is hard for the unacquainted even to make a comparison. Yet in the powerful mind of Mills -- Harvard lawyer, congressional chairman and all -- his father was not just papa but a legend big enough to block out the sun.

Long after A.P.'s death -- until his own, really -- the son's speech was sprinkled with references to the father. This devotion came at a price. The second son, Wilbur was called "son" by his family. When he went off more or less on his own, to Hendrix College in Conway, he asked the rest of the family not to call him "son" anymore. But not his father.

Later, even when he was in Congress and smoking several packs of cigarettes a day for 60 years, he never let his father see him smoke.

Mills obviously was a born politician, a man reflecting the values and traditions of his time and place -- the gentle and upright along with the brutal and even the crude.

But if he was born to politics, he was bred to business. Ways and Means was not just his domain, it was his natural habitat.

He leaves several monuments.

It is appropriate that in Searcy, two buildings are named for him, an imposing federal building and a distinctly unimposing alcoholism treatment center. He was proud of both.

The Ideas He Leaves

In assessing the public man, it is perhaps most appropriate to remember what he leaves as ideas. And none of his ideas had more resonance than those on federal taxation. He listed his principles in a 1958 speech. They were:

* "The basic reason for having a tax system is ... to raise such revenues as are required to defray the cost of established services which are rendered by the federal government."

* "Any revision of our tax laws should take account of the fact that we want and need a growing economy, both for the maintenance of our world leadership and also to improve our standard of living ... To obtain this growth, we must, of course, encourage investment."

* "Our tax system ... must be geared to collect proportionately more taxes in good times and proportionately less in bad times.

"Fairness ... This is not just a question of morality or fair play -- although this alone would be enough to make such a factor a major consideration -- but also it is essential to a self-assessment tax system wherein the amount paid depends upon the voluntary reporting."

* "Our tax system should be as nearly neutral as possible in its effects on decisions made by taxpayers."

* "A broad tax base and the imposition of taxes which the taxpayer is aware of at the time he pays them."

* "Simplicity."

David Terrell, a Washington-area writer, has worked for several years on a biography of Mills.

Setting The Standard

Mills' Top Aide Remembers The Man They Called 'The Boss'

OK, I am prejudiced.

If there is a norm by which political figures should be judged, I think its name is Wilbur D. Mills.

If there is a standard toward which aspiring political figures should be pointed, I think it should be called the Mills standard.

Let me cite a couple of reasons.

Campaign contributions were not accepted in years during which Mr. Mills had no campaign. The checks were returned with a stamp on the envelope because it was not "frankable" official business.

Investments in firms doing business with or supervised by the government were shunned.

One Little Rock insurance man begged Mr. Mills to put a price on stock the congressman held in the firm -- acquired by Mr. Mills' father when the boss was a boy -- because the boss said he could not vote on insurance legislation, or at least could not listen to the firm's point of view, while he owned the stock.

A seat on a bank's board looked good one weekend in Arkansas. But the cold light of Monday brought with it a feeling that a member of Congress, voting on matters affecting a bank's viability, had no business on such a board.

The "respect" Wilbur Mills' grandson mentioned at the boss' last rites was felt by virtually everyone who came in contact with him, although not everyone saw the same person.

It's not that he tried to be different things to different people or all things to all people.

It's just that everyone saw him differently.

There is a short list of people who were privileged to work for Wilbur Mills and, as far as I know, they all felt the same way.

They always referred to him as "Mr. Mills" or "the boss" or "the chairman."

They always said "yes, sir" just as his children and grandchildren did.

They always tried to get everything done right the first time, because Mr. Mills was a man who got things done, and he expected no less of his staff.

Except for Saturday mornings in his office at Searcy, Mr. Mills always showed up for work in a business suit, modified in later years by an occasional foray into a blue blazer and gray slacks.

The breast pocket of the coat always had a supply of freshly sharpened pencils. He never met a crossword puzzle he didn't want to solve.

Constituents Come First

When he visited with constituents -- who always came first, ahead of the political leaders and business and labor leaders who frequented his office -- he worked to put them at ease.

The boss read their mail carefully, and he listened closely when they talked to him.

He listened to:

* The serviceman who felt his enlistment contract should be canceled because the Army had not fulfilled its training commitment. (It was.)

* The veteran who felt his genetically derived disease was aggravated by military service and, therefore, a service-connected illness. (The Veterans Administration finally agreed.)

* The high school student who felt his record and his patriotism justified an appointment to a service academy.

These constituents, and others, saw a member of Congress ready, even anxious, to help with any problem they thought needed his attention.

What did others see?

Presidents saw a legislative leader who was an expert at counting votes and was determined to win the battles he entered in the House.

Colleagues on the House Ways and Means Committee saw a leader who would listen and understand each individual's point of view, a chairman who made sure every member was heard and present to vote.

In the office, we saw a man who was the soul of compassion, the epitome of fairness, a county judge transformed by election into a legislative role that eventually saw him ranked among the most powerful people in the world.

Mr. Mills took politics as it came. And for more than two decades, it came easy because he worked at keeping in touch with his constituents.

From 1942 until 1966, he was elected without opposition. In the latter year, running for the first time in a district that included Pulaski County, he picked up 75 percent of the vote.

The next race came in 1974, following the Tidal Basin incident, when Republican Judy Petty captured 42 percent of the vote.

Mr. Mills' decision to devote all -- or virtually all -- of his time to lecturing on substance abuse came the following year.

As the Ways and Means Committee chairman, Mr. Mills felt the tax code should be neutral in its influence on business. His position was that corporate decisions such as equipment purchases and plant expansions, and personal decisions such as the sale or acquisition of real estate, should be made on the basis of economic realities, not on the basis of tax consequences.

A Realistic View

Mr. Mills' view of the tax code was a realistic one. He often said one essential element was that all income be taxed. The other element was to set the rate of taxation.

Everything else was a loophole that either excluded a form of income from taxation or gave a form of income a special rate.

The problem Mr. Mills faced was that every loophole was put in place by Congress for a particular reason. The committee was not able to remove them without careful study.

Mr. Mills began an effort to rewrite the tax code in the early 1970s. He ran into a storm of protest from across the political spectrum.

He would have targeted specific exemptions, exclusions and deductions, putting them under an automatic repeal. They would have continued to exist only if Congress re-enacted them.

It was one of his few failures.

Gene Goss is executive assistant to the director of the Arkansas Educational Television Network at Conway. He was Mills' administrative assistant from Nov. 1, 1963, until Mills' retirement from Congress at the end of 1976. Goss, a North Little Rock native, was a broadcast journalist before joining Mills' staff.
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Title Annotation:Wilbur D. Mills; includes related article
Author:Terrell, David
Publication:Arkansas Business
Article Type:Biography
Date:May 18, 1992
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