The Week

■ “Sacrifice”? “Patriotism”? Don’t burn that flag, kid. Someday you may want to wrap yourself in it.

■ So far, only Stage 1 of Reversing the Reagan Revolution has been revealed—the big jump in the top income-tax rate and the new expandable BTU tax on energy. Stage 2 requires $100 billion or more to provide health care to the uninsured. Sin taxes on alcohol, tobacco, and guns won’t cover that. So get braced for the taxation of employer-provided health insurance. Stage 3 will be the taxation of pension contributions as current income. To gear up for this raid on private retirement income, Mr. Clinton has nominated a vociferous advocate of pension taxation, Alicia Munnell, as assistant treasury secretary for economic policy. Her plan is to fund public infrastructure investment by taxing both contributions and the annual earnings of the pension funds as current income. In addition, she wants to confiscate 15 per cent of all existing pension-fund assets to compensate the government for its failure to tax pension income in the past. Mrs. Munnell comes to the Treasury from the Federal Reserve Bank of Boston where she directed flawed studies that damaged the reputation of the bank’s research staff. Forbes exposed her most famous study, which claimed to prove racial bias in mortgage lending but which had failed to control for credit-worthiness and default rates. The Treasury staff must fear that their reputation will be her next victim.

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■ “Sacrifice”? “Patriotism”? Don’t burn that flag, kid. Someday you may want to wrap yourself in it.

■ So far, only Stage 1 of Reversing the Reagan Revolution has been revealed—the big jump in the top income-tax rate and the new expandable BTU tax on energy. Stage 2 requires $100 billion or more to provide health care to the uninsured. Sin taxes on alcohol, tobacco, and guns won’t cover that. So get braced for the taxation of employer-provided health insurance. Stage 3 will be the taxation of pension contributions as current income. To gear up for this raid on private retirement income, Mr. Clinton has nominated a vociferous advocate of pension taxation, Alicia Munnell, as assistant treasury secretary for economic policy. Her plan is to fund public infrastructure investment by taxing both contributions and the annual earnings of the pension funds as current income. In addition, she wants to confiscate 15 per cent of all existing pension-fund assets to compensate the government for its failure to tax pension income in the past. Mrs. Munnell comes to the Treasury from the Federal Reserve Bank of Boston where she directed flawed studies that damaged the reputation of the bank’s research staff. Forbes exposed her most famous study, which claimed to prove racial bias in mortgage lending but which had failed to control for credit-worthiness and default rates. The Treasury staff must fear that their reputation will be her next victim.