Martin's "Rich People's Movements"

Tax resisters have had their historians, including Carolyn Jones, who contributed a chapter on Viven Kellems to a book I edited with Victor Jew.  Now comes Isaac William Martin’s Rich People’s Movements: Grassroots Campaigns to Untax the One Percent (Oxford University Press).  Here’s the description:

On tax day, April 15, 2010, hundreds of thousands of Americans took to the streets with signs demanding lower taxes on the richest one percent. But why? Rich people have plenty of political influence. Why would they need to publicly demonstrate for lower taxes-and why would anyone who wasn't rich join the protest on their behalf?

Isaac William Martin shows that such protests long predate the Tea Party of our own time. Ever since the Sixteenth Amendment introduced a Federal income tax in 1913, rich Americans have protested new public policies that they thought would threaten their wealth. But while historians have taught us much about the conservative social movements that reshaped the Republican Party in the late 20th century, the story of protest movements explicitly designed to benefit the wealthy is still little known. Rich People's Movements is the first book to tell that story, tracking a series of protest movements that arose to challenge an expanding welfare state and progressive taxation. Drawing from a mix of anti-progressive ideas, the leaders of these movements organized scattered local constituencies into effective campaigns in the 1920s, 1950s, 1980s, and our own era. Martin shows how protesters on behalf of the rich appropriated the tactics used by the Left-from the Populists and Progressives of the early twentieth century to the feminists and anti-war activists of the 1950s and 1960s. He explores why the wealthy sometimes cut secret back-room deals and at other times protest in the public square. He also explains why people who are not rich have so often rallied to their cause.

For anyone wanting to understand the anti-tax activists of today, including notable defenders of wealth inequality like the Koch brothers, the historical account in Rich People's Movements is an essential guide.

Here’s the TOC:

Introduction: The Riddle of Rich People's Movements
Chapter One: The Revolution of 1913
Chapter Two: Populism against the Income Tax
Chapter Three: The Sixteenth Amendment Repealers
Chapter Four: The Most Sinister Lobby
Chapter Five: The Power of Women
Chapter Six: The Radical Rich
Chapter Seven: Strange Bedfellows
Chapter Eight: The Temporary Triumph of Estate Tax Repeal
Conclusion: The Century of Rich People's Movements

Roberts on Tax Brackets: A Historical Perspective

Tracey Michelle Roberts (Seattle University School of Law) has posted "Brackets: A Historical Perspective." It is forthcoming in the Northwestern University Law Review (2014). Here's the abstract:

This article surveys the history of the U.S. income tax system from 1913 to the present, examining changes in the structure of the graduated rates system over the past 100 years, using inflation-adjusted dollars. The article connects these changes to key events in the history of the United States and examines recent proposals for reform in light of those prior structures and history. First, the article demonstrates that the rate structure has become more flat (with lower rates and fewer brackets than in the past), compressed (with less graduation, steeper jumps between brackets, and less penetration of the rate schedule into the income strata), and complex (with the proliferation of tax expenditures) over time. Second, the article argues that the structures that would result from several tax reform proposals being discussed in the popular media resemble historical rates and brackets. Because these proposals for tax reform have analogs in earlier versions of the income tax, analysis of economic data from prior periods may help inform tax policy. The article then identifies an agenda for future research. Finally, the article argues that tax scholars examining the impacts of various tax policy proposals should supplement their existing scholarship with methodologies that incorporate historic data to provide a more complete analysis.

The full article is available here, at SSRN. 

"The 100th Anniversary of the Revenue Act of 1913"

New York Law School is marking the 100th anniversary of the Revenue Act of 1913 with a day of events. Here's the description and the schedule:

President Woodrow Wilson signed the Revenue Act of 1913 into law on October 3, 1913. On October 4, 2013, the 100th Anniversary Symposium will consider the past and future of the income tax and the practice of tax law. Keynote speakers Edward Kleinbard (former Chief of Staff of the Joint Committee on Taxation) and Karen Hawkins (Director of the IRS Office of Chief Counsel) will be joined by Lee Sheppard (star Tax Notes columnist), Meghan Brackney (Chair of the NYCLA Tax Section), Michael Hirschfeld (Chair of the ABA Tax Section) and other luminaries of the New York tax bar and the tax professoriate.

8:30am Registration and breakfast

9:00 to 9:30am – Welcome and Keynote Address

Edward Kleinbard, Professor of Law, USC Gould School of Law

9:30 to 11:00am Panel I – Withholding and Information Reporting from 1913 to FATCA

Ann F. Thomas (Chair), Otto L. Walter Distinguished Professor of Tax Law and Director of the Graduate Tax Program, New York Law School; Alan Appel, Professor of Law and Director, International Tax Program, New York Law School; Valeriya Avdeev, Assistant Professor, Cotsakos College of Business, William Paterson University; Lee A. Sheppard, Contributing Editor, Tax Analysts

11:15 to 12:30pm Panel II – Debt, Taxes and the Economy

Richard Beck (Chair), Professor of Law and founding director of the Graduate Tax Program, New York Law School; Diane Fahey, Associate Professor of Law, New York Law School; Maria Pirrone, Assistant Professor, The Peter Tobin College of Business, St. John’s University; Dennis Ventry, Professor of Law, UC Davis School of Law

12:30 to 1:00pm – Lunch

1:00 to 1:45pm – A Conversation with Lawrence Feld and Alan Appel: Highlights From the History of Criminal Tax Law Enforcement

Lawrence Feld, Partner, Law Office of Lawrence S. Feld

2:00 to 3:30pm Panel III – U.S. Tax Policy in a Global Economy

Reuven Avi-Yonah (Chair), Professor of Law, University of Michigan School of Law; Peter H. Blessing, Head of Cross-Border Corporate Transactions, KPMG, LLP; Diane Ring, Professor of Law, Boston College School of Law; Fadi Shaheen, Assistant Professor of Law, Rutgers-Newark School of Law

3:30 to 4:45pm Panel IV – Perspectives on the Practice of Tax Law

William LaPiana (Chair), Rita and Joseph Solomon Professor of Law, New York Law School; Megan Brackney, Partner, Kostelanetz & Fink LLP, and Chair, NYCLA Tax Committee; Michael Hirschfeld, Partner, Dechert LLP, and Chair, ABA Tax Section; Elizabeth Kessenides, Principal, Berdon LLP; Michael L. Schler, Partner, Cravath, Swaine & Moore LLP

4:45 to 5:30pm – Closing Keynote Address

Karen L. Hawkins, Director of the Office of Professional Responsibility, Internal Revenue Service

5:30pm to 6:30pm – Wine and Cheese Reception

 Follow the link to register.

Mehrotra's "Making the Modern American Fiscal State"

Out this month, and available for preorder now, is Making the Modern American Fiscal State: Law, Politics, and the Rise of Progressive Taxation, 1877–1929, by Ajay K. Mehrotra, Maurer School of Law at Indiana University, Bloomington.  The book appears in the series Cambridge Historical Studies in American Law and Society, edited by Christopher Tomlins.

Mehrotra has posted the Introduction and Conclusion on SSRN.  CUP helps with the rest:

Making the Modern American Fiscal State chronicles the rise of the U.S. system of direct and progressive taxation. Ajay K. Mehrotra provides historical perspective on the intellectual, legal, and administrative foundations of the current U.S. tax regime. In doing so, he uncovers the contested roots and paradoxical consequences of a fundamental transformation in American tax law and policy that took place at the turn of the twentieth century. He argues that the move toward a regime of direct and graduated taxation marked the emergence of a new fiscal polity – a new form of statecraft guided not only by the functional need for greater revenue, but also by broader social concerns about equity, fiscal citizenship, bureaucratic authority, and economic justice. This book explores what tax reformers at the turn of the twentieth century were able to accomplish and how their limited achievements were contested at nearly every turn.

The TOC and blurbs by Brian Balogh, Richard Bensel, Michael A. Bernstein, -Andrea Louise Campbell, and Lawrence M. Friedman appear after the jump.

Read more »

The Political Economy of Transnational Tax Reform

Just out from the Cambridge University Press is The Political Economy of Transnational Tax Reform: The Shoup Mission to Japan in Historical Context, edited by W. Elliot Brownlee, University of California, Santa Barbara, Eisaku Ide, Keio University, Tokyo, and Yasunori Fukagai, Yokohama National University, Japan.  Cambridge explains:

This volume of essays explores the history of the U.S. tax mission to Japan during the occupation following World War II. Under General MacArthur, economist Carl S. Shoup led the mission with the charge of framing a tax system for Japan designed to strengthen democracy and accelerate economic recovery. The volume examines the sources, conduct, and effects of the mission and situates the mission within the history of international financial and fiscal reform. The book begins by establishing the context of progressive social investigations of taxation, including Shoup's earlier tax missions to France and Cuba. It then goes on to explore the Japanese background to the Shoup mission and the process by which American and Japanese tax experts shaped their recommendations. The book then assesses and explains the mission's accomplishments in the context of the political economies of the United States and Japan. It concludes by analyzing the global implications of the mission, which became iconic among international tax reformers.

TOC after the jump.
Read more »

Shaviro reviews Steil, "The Battle of Bretton Woods"

Over at JOTWELL, Daniel Shaviro (New York University) has posted a review of Benn Steil, The Battle of Bretton Woods: John Maynard Keynes, Harry Dexter White, and the Making of a New World Order (Princeton University Press, 2013). Here are the first two paragraphs:

It’s always nice when you can combine outside reading for fun with something that is educational and at least indirectly professionally relevant.  Benn Steil’s economic and diplomatic history of the 1944 Bretton Woods conference, which established the post-World War II global framework for currency relationships and international trade (while also creating the International Monetary Fund and the World Bank) filled this niche for me during a quiet weekend.  While the subject is not literally or directly related to taxation, it touches so closely on finance, macroeconomic policy, and international trade as to occupy a common universe with overlapping concerns.

The book tells a lively story, in which U.S. Treasury economist Harry Dexter White – an ardent economic nationalist yet also a Soviet mole – thoroughly squelched the great English economist John Maynard Keynes (the U.K.’s chief negotiator) in establishing the postwar regime for trade, currency, and capital flows.  With the U.S. economically dominant and the U.K. reduced to begging for loans, Keynes would have had no chance even had he been better at converting his analytical and epigrammatic skills into diplomatic ones.

Read on here.

Young Americans Oppose Internet Sales Tax

In a recent Gallup poll, the majority of Americans (57%) say they would vote against a law that would allow each state to collect sales taxes on purchases its residents make online over the Internet. Young adults (73%) voice the most widespread opposition to such a law.

The Senate passed an Internet sales tax bill, the Marketplace Fairness Act, last month on a bipartisan basis, but it has yet to pass the House. This legislation would allow states to require online sellers to collect sales taxes, which would go to state and local governments. The legislation would apply to online retailers earning at least $1 million in sales outside of states where they have brick-and-mortar locations. Currently, online retailers do not have to collect sales taxes on Internet purchases unless they have a physical presence in the state.

This legislation faces more opposition in the House than it did in the Senate, with numerous members, including House Speaker John Boehner, criticizing it. The White House has announced that the president supports the legislation.

Age largely shapes Americans' views on taxing Internet sales. Younger Americans are much more likely than older Americans to oppose such a law. If Republicans in the House oppose the Internet sales tax bill, that may help the GOP's appeal to younger Americans, a key demographic in the party's plans to build support before the 2014 and 2016 elections.

Weekend Roundup

• We've previously noted the publication of Mrs. Shipley's Ghost, by Jeffrey Kahn. A (gated) review in the Chronicle of Higher Education is here.

• From History News Network: "How Did the IRS Get Investigatory Authority, Anyway?" Douglas M. Charles (Penn State) has the answer. 

• The European Association for Banking & Financial History presents 1914: Banks at War: Banks Confronted by WWI, a conference to be held on June 14, 2014.  Paper proposals are due September 1, 2013.  Hat tip: Legal Scholarship Blog

• Via the Poverty Law Blog: "In honor of the 50th Anniversary of the “War on Poverty,” the AALS sections on Poverty Law and Clinical Legal Education will sponsor a joint program at the AALS Annual Meeting, entitled 50 Years After the “War on Poverty": Evaluating Past Enactments and Innovative Approaches for Addressing Poverty in the 21st Century." More info here.  

• John Q. Barrett, St. John's Law, introduced Chief Justice John G. Roberts, Jr., at the Robert H. Jackson Center earlier this month.  Barrett's remarks touched upon, among other things, "some Jackson-like and Jackson-connected aspects of Chief Justice Roberts’ life and career; including his birth and early boyhood in western New York State, his service as a law clerk to former Jackson law clerk Justice William H. Rehnquist, and his private law practice with former Jackson law clerk E. Barrett Prettyman, Jr."

The Weekend Roundup is a weekly feature compiled by all the Legal History bloggers.

Kornhauser, "The Consistency of Conservative Tax Policy"

Marjorie E. Kornhauser (Tulane University School of Law) has posted "The Consistency of Conservative Tax Policy." It is forthcoming in the Northwestern University Law Review. Here's the abstract:

Modern American tax policy is in a state of disarray. Although conservatives are not solely to blame, their anti-tax campaigns bear a heavy responsibility for this situation. It is not that they fail to discuss issues; to the contrary they, raise important questions, such as the proper distribution of tax burdens, the relationship of taxation to economic growth, and especially the connection between taxing and spending — an issue that liberals often ignore. Rather, the problem is they consistently wrap their arguments in the American flag. Americans are especially susceptible to this technique given the country’s long history of anti-tax sentiment that dates back to the founding of the nation. Consequently, conservatives’ century-long campaign linking seemingly objective economic arguments for low (or no) taxation to American democracy have forced tax debates into a highly emotional, patriotic framework that impedes coherent debate and limits the range of politically feasible options.

My paper illustrates the consistency of conservative tax arguments — substance, style, and method — by examining conservative campaigns between 1924 and 1936 that linked opposition to a soldiers’ bonus to a reduction in taxes. These campaigns are especially interesting to examine because the time period in which they occurred bears several important similarities to present times. The economic conditions during the Depression present obvious similarities to current times, but other important similarities make this a useful period of comparison. Like today, the growth of government, especially at the federal level, during this period strengthened conservative fears of unconstitutional expansion of the central government and the consequent weakening of American democracy and the sapping of American character. Like today, conservatives saw taxation as a key factor in this crisis. Since taxes funded expanded government functions, cutting taxes would help shrink government.

Finally, although lobbying is co-existent with government, modern, media-driven sell-the-candidate (or policy) campaigns first matured in this era. In both eras the development of new mass media invigorated the marketplace of ideas even as the increased knowledge about human behavior enhanced opportunities to manipulate public opinion. This is especially true for grassroots organizations that frequently present themselves to the public as broadly-supported civic groups providing neutral educational information whereas, in fact, it is a small (often wealthy) number of individuals and/or companies trying to influence the public to adopt their self-interested viewpoint.

The full article is available here, at SSRN.

Weekend Roundup

• Jonathan Levy's Freaks of Fortune pretty much killed it at the OAH awards ceremony this year. Check out the other winners here.

•  From the Historical Society: a thoughtful post on "John Adams and the Rule of Law in Boston."

• Repayable taxes: An ancient fiscal technique worth revisiting? Read on at HNN.

• From the OUP blog: Susan Ware on "the challenges and rewards of biographical essays." (Hat tip: Historical Society) 

• From the New York Times: a story on preserving historical artifacts in the digital era. 

• And in the ABA Journal, Fading Past: Are Digitization and Budget Cuts Compromising History? by Hollee Schwartz Temple.

The Weekend Roundup is a weekly feature compiled by all the Legal History bloggers.

Mehrotra on the Bipartisan Origins of the Federal Income Tax

Bloomberg.com yesterday carried an op-ed by Ajay Mehrotra, Indiana Law, on The Bipartisan Origins of the Income Tax. "Our current tax system," he writes, "is a byproduct of the longstanding American ambivalence toward centralized political power. It is a form of statism for anti-statists"  More.

Foster on Partisan Politics and Income Tax Rates

William E. Foster, Washburn University School of Law, has posted Partisan Politics and Income Tax Rates, which is to appear in Michigan State Law Review in 2013.  Here is the abstract:    

With income tax reform dominating so much of the current political discourse, now is an optimal time for tax scholars to reflect on the lessons and trends from a century of legislative tinkering with the primary revenue-generating device in the United States. Tax rate changes do not occur in a vacuum, and this article explores one increasingly prominent and often overlooked ingredient in the mixture of variables that can produce or inhibit tax reform -- partisan politics. It does so by comparing individual income tax rates with partisan control of federal political bodies. This article reviews majority party status in the House of Representatives and the Senate, and control of the presidency at times of revisions to top marginal tax rates applicable to various income groups, and notes larger rate trends in the parties’ respective eras of most significant influence. Despite the limitations inherent in isolating a single influential factor, the data analyzed in this article provides strong support for the following trends: higher income earners are the tax rate battleground for party policy implementation; a vast political mandate represented by control of the House, Senate, and presidency is usually necessary to accomplish significant rate revisions; when a sufficient political mandate is achieved, the parties’ implementation of rate changes follows their respective rhetorical associations; and in the end, absent armed conflict or economic crisis, sizeable rate changes are exceptionally rare. These extractions from a century of legislative maneuvers bring scholars closer to unearthing the political recipe for tax rate reform, and accordingly, to a fuller understanding of the necessary components of tax policy implementation.

Americans Pessimistic About Fiscal Cliff Negotiations

With the fiscal cliff looming just weeks away, the Pew Research Center released a poll reflecting the public's concerns regarding the ongoing negotiations between the White House and Republican Congressmen. 40% of Americans believe lawmakers will reach a deal before the January 1^st deadline, when mandatory spending cuts and tax increases take effect.  49% believe no deal will come to fruition, hurling the U.S. over the fiscal cliff – something many experts believe will drag the economy into another recession.  If no deal is reached, 53% of the public said they'd blame Republican Congressmen, and just 27% would place blame on President Obama.  Democrats are more optimistic about negotiations, with 55% saying they expect a deal to emerge before the New Year, compared with just 22% of Republicans