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March 1, 2004
Who Cares About Tax History? More People Than You Think!
Joseph J. Thorndike

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By Joseph J. Thorndike

"So what's the point of this whole tax history thing, anyway?" As head of Tax Analysts' Tax History Project it's not uncommon for me to hear that question. Someone once asked me why Tax Notes was willing to waste good paper on such an obscure topic.

But I've always been convinced that tax history is important, even though it's not always been an easy sell. Recently, however, the field has entered something of a renaissance. (That may come as a surprise to those who never realized there had been a dark age. But there was and now it's over.)

Tax history has officially come of age when the august scholars at the University of Cambridge organize a conference in the United Kingdom to discuss it. This summer, Cambridge's Lucy Cavendish College will host a "history of tax law" conference with seven sessions, 20 papers, tea (twice!), and a "celebratory formal dinner with wine." That's my kind of conference.

Scheduled for July 5 -- presumably to allow American participants to finish celebrating their own tax rebellion before jetting off to the land of George III -- the conference features many of the leading scholars in this small, cross-disciplinary field. A sampling from the program includes:

  • "Corporations, Society, and the State: A Defense of the Corporate Tax," by Reuven Avi-Yonah, University of Michigan Law School;
  • "Entity Theory as Myth in the Rise of the Modern Corporate Income Tax" by Steven Bank, University of California Law School, Los Angeles;
  • "Decline and Fall of Wealth Transfer Taxation," by David Duff, University of Toronto;
  • "Bonds and Voluntary Taxation During World War II," by Carolyn Jones, University of Connecticut Law School; and
  • "Lawyers, Guns, and Public Monies: The U.S. Treasury, World War I, and the Administration of the Fiscal State," by Ajay K. Mehrotra, Indiana University (Bloomington).

For those who can't make this summer's conference, take heart: Tax history is alive and well on this side of the pond too.

In January, the annual meeting of the Association of American Law Schools included a tax history panel organized by Duke University Law Professor Lawrence A. Zelenak. Designed to shed some light on the "whys and hows of historical tax research," with an eye toward attracting even more legal scholars to the field, the panel featured four tax historians. (Full disclosure: I was one of them.) The session was full of surprises, not the least of which was the number of people in the room. But Charlotte Crane, a law professor at Northwestern University, caused the biggest stir when she circulated a 35-page bibliography of Anglo-American tax history. Thirty-five pages! Who knew? Europeans have long paid more attention to fiscal history than have their American counterparts, but even in the United States, lawyers, accountants, economists, political scientists, and a few historians have been tilling this ground productively.

Crane compiled the bibliography to provide a starting point for interested scholars. "Those who delve into many of the works cited," she predicted, "will undoubtedly be horrified at how often those not coming to their subject with a legal tax academic background will, first, simply think that they know all that there is to know about taxes in any particular period by referring to a simple one-sentence type of description of the tax, or, if they are somewhat more subtle, think that all of the politics that matters happens in the legislative arena." (Crane's bibliography will appear later this year on the Tax History Project Web site at

Connecticut's Carolyn Jones, the first panelist to speak, argued that historical materials can provide "snapshots of the thought processes of those charged with administration of the tax laws." In particular, history can illustrate the ways in which officials have used the mass media, advertising, and polling data to help develop and maintain the modern tax system. Officials, she pointed out, have also developed relationships with churches, civic organizations, and other "intermediate groups" to help advance their goals. In general, Jones contended, a "more culturally-based approach to taxation provides a 'why' for the legal history of taxation."

Panelist Steven A. Bank of UCLA noted that history can shed light on the context and "changed circumstances" surrounding American tax law. Relevant context might include legal, political, social, cultural, and business conditions. "In each case," he said, "the context is relevant both for interpreting the law as it exists today and for arguments in favor of reform based upon anachronism." Done carefully, tax history can even be used to fashion predictions or explain results. Finally, Bank argued, history can be used to illustrate or test theory, including such popular topics as public choice theory and path dependency.

Tulane University law professor Marjorie Kornhauser provided a short tutorial on the hows and whys of tax history. Attempting to demystify the practicalities of historical research, she offered a primer on archival research, the sine qua non of historical scholarship. She also encouraged aspiring historians to select almost any topic for study, since most periods and subjects remain understudied (Crane's 35 pages of citations notwithstanding).

Kornhauser stressed the importance of avoiding anachronistic thinking, and she is certainly right on this score. Historians are fond of noting that "the past is a foreign country," strange and difficult to understand. But we must strive to approach the past on its own terms. Projecting the present into the past almost guarantees distortions.

As the only nonlawyer on the panel -- or perhaps even in the room -- my task was to play the nag. Building on Kornhauser's point about anachronism, I urged the audience to avoid "presentism." Lawyers, it often seems, want their history to do something -- prove some point, explain some development, or justify some prediction. History can do that. But the discipline is best and most responsibly practiced when pursued for its own sake. Only when the work is done can we hope to assess relevance. Of course, that means that much historical scholarship ends up being irrelevant.

That's the price of good history. When relevance becomes the starting point -- rather than the finishing line -- it has a tendency to distort the whole story.

In my view, tax history is important because it expands our notion of the possible. All too often we take the boundaries and assumptions of current debate for granted. We've ended up in this historical moment through a complicated and contingent process. The world was not always thus, nor will it remain so. Unless we want to be caught by surprise when the ground shifts under our feet, we had best not ignore the past.