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GITT September 14, 1948 Captain Robert A. Stone 412 East Avenue LaGrange, Illinois Dear Captain Stone: This will acknowledge your letter of September 8, 1948, raising certain questions about the draft bill providing for the creation of an air line pilot's retirement system. My comments are given the same numbers as your questions. (1) All of the social security legislation enacted by the Congress of the United States is based on the separate exercise of two Congressional powers: the power to tax and the power to spend. It is a well settled principle of the law of taxation that the tax to be valid--that is, not to be thrown out in a court test--must apply equally to all members of a class. That equal application must be imposed by the Congress and cannot be based on the election of individuals, either as persons or corporations; the taxes for social security must stand the same legal tests as any other taxes. You would not think of suggesting that the general federal income tax or the excise tax on cigarettes be paid only by those who elect to do so; the proposed tax on pilots is an income tax and that on the air lines is an excise tax. The tests as to their legality are the same as for any other income and excise taxes. I might add that the existing basis of that legality is still less than twelve years old. Without wishing to belabor the point too much, consider one further consequence of an election by the pilot: The draft bill, as the Social Security and Railroad Retirement Acts, levies taxes on both the individual covered and the employer. It is not open to doubt that an act which levies an excise tax on an employer, to the extent that his employees elect to pay an income tax, is so unmistakenably illegal that its enactment by Congress is inconceivable. A brief answer to the question which you have raised, therefore, is that on the basis on which Congress has legislated in this field up to now, an individual election is not permissible.