Berger on Rosalind's Refund: The Woman, the Lawyers, and the Time That Created McClanahan v. Arizona

Bethany Berger, University of Iowa College of Law, is publishing Rosalind's Refund: The Woman, the Lawyers, and the Time that Created McClanahan v. Arizona in the Kansas Law Review (2025). Here is the abstract.

Rosalind McClanahan was just twenty-two when she set one of the most important cases in federal Indian law into motion. On April 1, 1968, she filed her Arizona tax return, along with a protest that all the money withheld from her pay—$16.29—should be refunded because she was a Navajo citizen whose income was earned entirely on the Navajo reservation. The Arizona Tax Commission ignored her claim and the Arizona courts rejected it. But the Supreme Court ruled unanimously in her favor, building a foundation for many more decisions rebuffing state jurisdiction as well as landmark legislation such as the Indian Child Welfare Act and Indian Gaming Regulatory Act. This Essay, the first full history of McClanahan, examines the origins of the decision as part of the Kansas Law Review’s symposium on impact litigation in Indian country. Rosalind McClanahan was born in an era of renewed pressure for Indian assimilation but came of age as tribes and Indigenous people increasingly insisted on self-determination. This moment had a direct influence on her case: her education at Window Rock High School (where she was elected Class Treasurer) resulted from new pathways to challenge Indian exclusion from public schools; her employer was the First Navajo National Bank, which opened in 1962 as the first bank on the 16-million-acre Navajo Nation; and her lawyers came from Diné be’iiná Náhiiłna be Agha’diit’ahii-Legal Services (shortened to “DNA”), which the Navajo Nation brought to the reservation as part of a new wave of federally funded organizations providing legal services to the poor. Each of these developments shaped both the decision and its impact.

Download the article from SSRN at the link.

ICYMI: Buckles on Bob Jones University v. United States: A Journey Through Scriptures and History

ICYMI: Johnny Rex Buckles, University of Houston Law Center, has published Bob Jones University v. United States: A Journey Through Scripture and History in Law and Religion: Cases in Context (Leslie C. Griffin ed., 2010). Here is the abstract.

In Bob Jones University v. United States, the United States Supreme Court held that two schools maintaining racially discriminatory policies as to students failed to qualify for federal income tax exemption as organizations described in section 501(c)(3) of the Internal Revenue Code. A contextual analysis of Bob Jones University offers insight into a politically charged, historically important controversy rooted in biblical and theological compromise under the pressures of Southern fundamentalist education in the twentieth century. Fundamentalist and segregationist impulses combined with an obsequious deference to founding visionaries to produce admissions policies that betrayed the schools’ underlying religious principles.

Download the chapter from SSRN at the link.

Guerra-Pujol on Adam Smith's Blind Spot

F. E. Guerra-Pujol, Pontifical Catholic University of Puerto Rico; University of Central Florida, has published Adam Smith's Blind Spot. Here is the abstract.

This article connects Adam Smith's maxims of taxations-as well as a possible precursor to Smith's maxims: Roussel de la Tour's Richesses de l'etat-with Geoffrey Brennan and James Buchanan's critique of optimal taxation theory. Among other things, Brennan and Buchanan's critique of the optimality criterion fills an important gap not only in the optimal-tax literature but also in Adam Smith's thought.

Download the article from SSRN at the link.

Cui on False Idols in the Early History of International Taxation @AllardLaw

Wei Cui, University of British Columbia Faculty of Law, has published False Idols in the Early History of International Taxation. Here is the abstract.

A careful reading of recent scholarship on the early history of international taxation, especially on the League of Nations' work on "double taxation," ought to have dislodged many myths about this history. But more often than not, such scholarship is taken to offer mere details without altering our fundamental understanding. This paper suggests that this reception reflects a longstanding pattern in discourses about international taxation: participants perpetuate or cling onto narratives that are easily seen to be false. The paper exposes this pattern by summarizing evidence for four rarely-acknowledged conclusions about the League's output on international taxation. First, rather than advancing any agreed proposal, the 1923 "Four Economists Report" reflected fundamental disagreements (in both theory and practice) between the world's then two leading capital exporters, the U.S. and Britain. Second, the League's 1925 Technical Experts Report substantially changed the topic from the Four Economists Report. By focusing on coordination conventions among countries imposing only source-based taxation, it offered little of interest to the U.S. and Britain, and rendered international agreement even more difficult by conflating distinct policy issues. Meanwhile, it launched an institutional narrative that, whatever the problems of international taxation were, the League offered relevant solutions. Third, this narrative began to allow lobbyists like Mitchell Carroll to advance business interests under the League's disguise in the 1930s. Fourth, by the time of the Mexico Model, "the League's" double taxation work served little more than narrow institutional and personal interests. In each of these last three stages of the League's work, despite the lack of genuine intellectual continuity, parties appealed to earlier League outputs to legitimize their own (often questionable) pursuits. This practice continued in the activities of the Organisation for European Economic Cooperation in the 1950s, and one suspects that it is even more significant today. The paper suggests that the durability of this practice may be attributable to both ambiguous principal-agent relationships in the context of weak international organizations sponsoring informal norm setting, and persistent intellectual confusion about the subject of international taxation.

Download the article from SSRN at the link.

Brooks and Gamage on The Original Meaning of the Sixteenth Amendment @FordhamLawNYC @davidsgamage

John R. Brooks, Fordham University School of Law, and David Gamage, University of Missouri School of Law, are publishing The Original Meaning of the Sixteenth Amendment in the Washington University Law Review. Here is the abstract.

The Sixteenth Amendment to the United States Constitution enshrines Congress’s “power to lay and collect taxes on incomes, from whatever source derived.” Challenges to the exercise of that power have typically turned on whether the thing being taxed is “income” or not. In the most recent example, the 2023 Supreme Court case of Moore v. United States, taxpayers have argued that the Sixteenth Amendment only authorizes taxation of realized income—this is, that gain from appreciated property can only be taxed as “income” when there has been a sale or conversion of that property. In this Article we argue—based on the original meaning of the Sixteenth Amendment—that this approach to constitutional tax questions is wrong. The focus of the Sixteenth Amendment and of the Congressional income tax power is not “income” per se, but rather “taxes on incomes, from whatever source derived.” Thus, the question should not be whether the thing being taxed satisfies some isolated definition of “income,” but rather whether that tax in question comports with the original meaning of “taxes on incomes.” This is because, as we show here, the explicit and well-understood original meaning of the Sixteenth Amendment was to overrule the Supreme Court case of Pollock v. Farmers’ Loan & Trust Co. and restore the “complete and plenary power of income taxation” as it was understood at the time. The Amendment did not create Congress’s power to tax income, a power which it had been exercising since the Civil War; rather, it merely removed the impediment Pollock had introduced. This original meaning of the Amendment was communicated clearly at that time both in Congress and in the press. Thus, to understand the power the Sixteenth Amendment authorized, we should look at the practice and experience of income taxation at that time. Our examination shows that federal (and state) income taxes explicitly included many items of “unrealized” income, such as shareholders’ shares of undistributed corporate earnings (the issue in Moore). We also show—for the first time in the modern literature—that the federal corporate income tax law at the time of the Sixteenth Amendment’s ratification incorporated elements of “mark-to-market” taxation—treating unrealized gain from the appreciation of assets as gross income for tax purposes. This historical review thus reveals that Congress’s power to tax income is broad and should not be limited by appeals to constrained definitions of “income” isolated from the historical context.

Download the article from SSRN at the link.

Brooks and Gamage on Moore v. United States and the Original Meaning of Income @davidsgamage @FordhamLawNYC @IUMaurerLaw

John R. Brooks, Fordham University School of Law, and David Gamage, Indiana University Maurer School of Law, have published Moore v. United States and the Original Meaning of Income. Here is the abstract.

In the upcoming Supreme Court case of Moore v. United States the taxpayers are challenging whether unrepatriated earnings of a foreign corporation can be “income” of a shareholder under the Sixteenth Amendment. The case therefore raises a question that the Court has rarely had to address in the last 100 years—what is the meaning of "income" under the Sixteenth Amendment? And furthermore, is realization required before the gain from property ownership can be treated as income? Central to answering those question is another question: What is the original meaning of income at the time of the Sixteenth Amendment’s ratification? The taxpayers in Moore (and the Ninth Circuit judges who dissented from the denial of rehearing en banc) argue that some concept of realization is necessarily a part of the original meaning of income—i.e., that there must be some act of separation or conversion of property into cash or other property in order for there to be income. In this essay, we highlight some of the major errors and omissions of the taxpayers, amici, and Ninth Circuit dissenters related to the question of original meaning. We show that contemporary definitions of income did not incorporate—and could not have incorporated—the contemporaneous definition of realization, and that they in fact incorporated unrealized gain. Furthermore, we show that pre-ratification and contemporaneous federal tax law explicitly included undistributed corporate earnings in shareholders’ income. We also show—we believe for the first time in the literature—that the federal corporate income tax law at the time of the Sixteenth Amendment’s ratification explicitly included unrealized gain from the appreciation of assets as gross income for tax purposes. Given this evidence, it is clear that realization could not have been a necessary and required element of the original meaning of income.

Download the article from SSRN at the link.

Roberts on A Man For His Era and For Ours: Cordell Hull, Father of the Federal Income Tax @traceymroberts @CumberlandLaw

Tracey M. Roberts, Samford University Cumberland School of Law, has published A Man for His Era and for Ours: Cordell Hull, Father of the Federal Income Tax at 53 Cumberland Law Review 41 (2022). Here is the abstract.

An 1891 graduate of Cumberland School of Law, Cordell Hull served our country in countless ways. He served as captain of the Fourth Regiment of the Tennessee Volunteer Infantry in the Spanish- American War, as judge for the fifth judicial circuit of Tennessee, as a member of the Tennessee State House of Representatives, the United States House of Representatives, and the United States Senate, and as United States Secretary of State. President Franklin D. Roosevelt referred to him as the “Father of the United Nations.” Hull received the Nobel Peace Prize in 1945 in honor of his work to establish that body. Hull is less well known for his work to establish another important and enduring institution—the federal income tax. In his 1948 memoir, Hull wrote that he doubted that he would be able to render public service equal to his work to establish the income tax system even if he had two lifetimes. This essay explains why Hull regarded the federal income tax as among his chief contributions. First, it outlines Hull’s personal history, his experiences with his mentor, United States Representative Benton McMillin, and Hull’s efforts to pass the Revenue Act of 1913. Second, it discusses the historical, economic, and political context that motivated Hull to introduce the tax reform that sustained the United States through two world wars and made possible widespread economic prosperity in the twentieth century. Finally, it discusses the original impetus for reform, compares the economic conditions from over 100 years ago to those prevailing today, and outlines what it would take to fulfill Hull’s vision and intentions for the federal tax system and the country in the present.

Download the article from SSRN at the link.

Littlewood on Nothing New Under the Sun: Tax Avoidance in Otago in 1856

Michael Littlewood, University of Auckland Faculty of Law, has published Nothing New under the Sun: Tax Avoidance in Otago in 1856. Here is the abstract.

This paper examines a rule against tax avoidance enacted by the legislature of the New Zealand province of Otago in 1856. The tax was a toll collectable by licensed operators of ferries over rivers; and the rule required persons crossing the river to pay the toll, even if they did not use the ferry.

Download the paper from SSRN at the link.

Littlewood on Sir George Grey's Machiavellian Constitutional and Fiscal Reforms in Aotearoa New Zealand, 1845-1876 @AKLLawSchool

Michael Littlewood, University of Auckland Faculty of Law, has published Sir George Grey’s Machiavellian Constitutional and Fiscal Reforms in Aotearoa New Zealand, 1845–1876. Here is the abstract.

This paper examines the evolution of the New Zealand tax system from 1845 to 1876. The key to this period is the New Zealand Constitution Act 1852 (UK), which was devised by the Governor, Sir George Grey, and which divided the Colony into six provinces. There were hardly any roads, so allowing isolated settler communities a degree of autonomy made obvious sense. Grey’s more sinister aim, however, was to retain control of the purse-strings and thus dictate policy generally. In this he was markedly successful: the Act gave the Governor tight control over the Colony’s two main sources of revenue (land sales and customs duties) and also over the military (which he used to confiscate Māori land). The provinces were free to build and operate roads, wharves, railways, schools, hospitals and so on — but they had to either persuade the Governor to supply funding or pay for them themselves. Twenty years later the difficulties of communication had been largely solved and the Colonial Government, spectacularly insolvent prior to Grey’s arrival, was financially secure. The provinces had served their purpose and in 1876 they were abolished. Since then, New Zealand has had one of the most centralised systems of government and taxation in the world, and the Māori people are still suffering from the catastrophic loss of their land.

Download the article from SSRN at the link.

Crawford and Afield on How Yesterday's Protestor May Be Tomorrow's Saint: Reimagining the Tax System Through the Work of Dorothy Day @HaubLawatPace @ProfBCrawford @ProfAfield @GeorgiaStateLaw @nyulaw

Bridget J. Crawford, Pace University School of Law, and W. Edward "Ted" Afield, Georgia State Univeristy College of Law, are publishing Yesterday's Protestor May Be Tomorrow's Saint: Reimagining the Tax System Through the Work of Dorothy Day in the Tax Law Review. Here is the abstract.

When is the nonpayment of taxes justified by conscientious objections? Legendary Catholic social activist Dorothy Day refused to pay federal income taxes, because she was an avowed pacifist who also cautioned against government overreach into the lives of citizens. This article asks whether the tax system should accommodate those who have moral objections, and if so, how accomplish that. Through the lens of Dorothy Day, who devoted her adult life to workers’ rights, pacificism, and service to the poor, this article makes three contributions to the conversation about the administration of a fair tax system. First, the article examines Day on her own terms. It is difficult, but not impossible, to reconcile Day’s tax resistance with the Catholic social teaching on taxation that was emerging during her lifetime. Second, the article considers what insights Catholic doctrine offers into the structure and substance of a just tax system. Although there is not as much theological writing on taxation as there is on other social issues, Catholic social teaching does provide some guidance about the purpose, form and operation of a just tax system. From these insights, the article moves to suggest specific improvements to the tax system: formal mechanisms that bring conscientious objectors into tax compliance; enhanced communication about the tax system’s role in administering the country’s most effective anti-poverty programs; and enforcement priorities that do not disproportionately target the poor. While these proposals might not be sufficient to have caused a steadfast antiwar protestor like Day to pay taxes, they illuminate a path toward much-needed reforms of the federal income tax system.

Download the article from SSRN at the link.

Gribnau and Hughes on The Enlightenment and Influence of Social Contract Theory on Taxation @HGribnau @TilburgLaw @UniofNottingham

Hans Gribnau, Tilburg Law School; Leiden University, and Jane Frecknall Hughes, University of Nottingham, have published The Enlightenment and Influence of Social Contract Theory on Taxation. Here is the abstract.

This paper considers some of the most important political philosophers of the Enlightenment (taken as broad concept) – thinkers whose reflections on the idea of a social contract we relate to their views on taxation. Hobbes argues for an (almost) absolute political sovereignty and legal authority and corresponding obedience of citizens constituted by the social contract. For Hobbes, taxes are justified as the price of security. He advocates the benefit theory of taxation, best measured by consumption. The same goes for Locke, although for him the social contract serves to guarantee the individual’s property rights which embody his liberty. Taxes are the price of the protection of the right to property. Both Montesquieu and Hume do not have need for a social contract: man living in societies is a fact of life. Their focus is on legitimate government rather than sovereignty and obedience. Hume inherently adheres to the benefit theory of taxation as paying tax is contributing to society on which one depends to survive. Montesquieu is a proponent of indirect taxation, though he considers progressive taxation and a subsistence minimum which must not to be taxed. For him, tax fairness is a contextual affair, since taxation should be relative to a given form of government. Rousseau radicalises the notion of the social contract which is a device to protect an equal freedom for all. He transposes the emerging new ideal of equality to taxation which not only is to enable government to protect its citizens, but also to consider their subsistence. Taxes should enhance liberty and equality (distributive justice). Thus, progressive taxation based on the ability to pay is put on the agenda. Rousseau’s popular sovereignty was self-evident for Paine, the Federalists and Anti-Federalists alike. Paine argued for a more radical redistribution as taxes should pay for welfare provision which was part of his proposals for reform. Both the Federalists and Anti-Federalists elaborated on Montesquieu’s plea for the separation and distribution of powers, but unlike in Montesquieu, their take focus was on multi-level governance. Like the other theorists, they approached taxation from their political-philosophical perspective.

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Cutler on A Hebrew Republic in the Gilded Age? Henry George's Single Tax and the Hebrew Bible

Joshua Cutler, University of Houston College of Business, has published A Hebrew Republic in the Gilded Age? Henry George’s Single Tax and the Hebrew Bible. Here is the abstract.

Henry George sparked a vast popular movement following the publication of his classic work Progress and Poverty. Seeking to explain why poverty always seemed to increase along with progress, George proposed that, as societies advanced, land owners were able to capture an increasing share of wealth. To remedy this, George proposed a “Single Tax” on the unimproved value of land, which would prevent land speculation and hoarding and make land available for all who desired to work it. While George was ostensibly an economist, he is best understood as an ethical-religious figure, and his most devoted followers were a diverse array of religious leaders and reformers. However, the actual religious substance of George’s ideas has been largely unexplored. I propose that George’s program was inspired by Jewish ideas and institutions originating from the Hebrew Bible. In Hebraic thought, by virtue of creating the earth, God is the only rightful owner of land. This principle was embodied in the Hebrew Bible’s land laws that ordained an equal distribution of land along with institutions to maintain this distribution over time. Centuries before George, I discuss how medieval Jewish rabbis had already derived a taxing power from the Hebraic land laws. These biblical land laws would also come to have a strong influence on European political thought through an intellectual tradition known as the “Hebrew Republic.” I attempt to understand Henry George’s thought as an unwitting revival of this tradition, with his Single Tax as an innovative adaption of the Hebraic institutions. The Hebraic understanding of land ownership continues to offer potential inspiration for alternative systems of taxation and economic regulation.

Download the article from SSRN at the link.

Avi-Yonah on Studying Tax History (Book Review of Studies in the History of Tax Law, vol. 9)) @UMichLaw

Reuven S. Avi-Yonah, University of Michigan Law School, has published Why Study Tax History? Here is the abstract.

This book review addresses the question why studying tax history is helpful to tax policy makers and practitioners.

Download the book review from SSRN at the link.

Kornhauser on Lobbying & Taxation, 1924-1936 @TulaneLaw

Marjorie E. Kornhauser, Tulane University School of Law, has published Lobbying & Taxation, 1924–1936 Part 2: American Voices in a Changing Democracy: Women, Lobbying, and Tax 1924–1936. Here is the abstract.

This Part of AMERICAN VOICES IN A CHANGING DEMOCRACY: WOMEN, LOBBYING, AND TAX 1924-1936 provides some background about two important aspects of American democracy that were greatly affected by societal changes during the 1924–1936 period: lobbying and taxation. It begins with a very brief discussion of the importance of lobbying in American politics and then focuses on the “new” lobbying of the 20th century. Although lobbying is as old as history, technological advances, especially in mass communications, facilitated changes in American lobbying that by the 1920s caused such concern among many politicians and commentators that they labeled lobbyists the “third house” of Congress. This Part then concludes with a brief overview of tax issues during 1924–1936 that persist today.

Download this part of the book from SSRN at the link.

Kornhauser on Women & Lobbying, 1924-1936: American Voices in a Changing Democracy @TulaneLaw

Marjorie E. Kornhauser, Tulane University School of Law, has published Women &  Lobbying, 1924–1936 Part 3: American Voices in a Changing Democracy: Women, Lobbying, and Tax 1924–1936. Here is the abstract.

This Part of AMERICAN VOICES IN A CHANGING DEMOCRACY: WOMEN, LOBBYING, AND TAX 1924-1936 provides background about women and lobbying during the 1924 – 1936 period of the book. It begins with a brief discussion of the changing role of women during this period. It describes the ways industrial and societal changes altered women’s roles in the domestic context as well as expanded their place in the public sphere. The chapter then proceeds to a discussion of women’s clubs, women’s political activity and women’s lobbying generally. It concludes with a brief analysis of women as progenitors of the 20th century’s “new” lobbying.

Download this part of the book from SSRN at the link.

ICYMI: Sobecki on A Southwark Tale: Gower, the 1381 Poll Tax, and Chaucer's The Canterbury Tales @SebSobecki

ICYMI: Sebastian Sobecki, University of Groningen, has published  A Southwark Tale: Gower, the 1381 Poll Tax, and Chaucer’s The Canterbury Tales, at 92 Speculum  630 (July 2017).

Download the article at the link.

Richards on an Expressive Theory of Tax @CornellLaw

Kitty Richards, Independent, is publishing An Expressive Theory of Tax in volume 26 of the the Cornell Journal of Law and Public Policy (2017). Here is the abstract.

The tax code is full of ineffective, inefficient, inequitable, or otherwise problematic provisions that make little sense when evaluated through the lens of traditional tax policy analysis, yet remain popular with citizens and legislators alike. The tax literature is equally full of carefully-researched, technically precise, and theoretically sound proposals for reform that nonetheless fail to get traction in the public debate. Why? What tax scholarship is missing is the importance of social meaning: what do our tax laws say about our society’s values, and how is taxation being used to construct cultural ideals in contested spaces? This article applies expressive theory, well developed in the criminal and constitutional law literature, to a series of tax policy puzzles, demonstrating how attention to social meaning can help to explain otherwise inexplicable behavior by legislators and policymakers, and can allow scholars to engage more productively in the policy process. From the tax treatment of Nevada’s legal brothels to tax preferences for retirement savings, social meaning matters, and frequently dominates traditional tax policy concerns. This observation has far-reaching implications for tax scholarship, policy design, and advocacy.

Download the article from SSRN at the link.

Tax Law and Hallowe'en Candy

Kelly Phillips Erb discusses the tax consequences of leftover Hallowe'en candy, here, for Forbes Magazine. Via @BitsyNOLA. (Not listed: entertainment for felines. I caught mine playing kitchen hockey with some of the pieces before I could bring it to work).

Churches, the IRS, and "Foul Play"

Reading commentary like Sam Brunson's post on whether the IRS ought to be able to audit churches, and under what circumstances (here, at The Surly Subgroup) makes me think about the film Foul Play (1978), which starred Chevy Chase and Goldie Hawn. Remember that conspiratorial group in the movie, the "Tax the Churches League"? They were behind murders and all sorts of bad stuff, and what motivated them was the notion that religious organizations ought not to be exempt from taxation.

Pros and cons of church (and other religious denomination) exemptions here.

Channing on David Bowie, Rock Music, and Tax Law

Here's an interesting take on tax law and pop culture.

Emma Channing has published an essay, Bowie: Rock God or Tax Genius? Here is the abstract.

Even now, nearly 20 years on from issue, the Bowie Bonds remain a remarkable creation that spawned over 100 similar transactions in the music industry, and some claim, triggered the creation of more dubious derivatives that played such an enormous part in triggering the Great Recession. Following David Bowie’s tragic death in January 2016, there has been a great deal of coverage of the Bowie Bonds and their origination, but one aspect has always been overlooked, and that is the tax structuring. The Bowie Bonds arguably were a tax free structure paying 15 years income totaling $55m in one bullet payment by the first securitization of intellectual property rights, namely Bowie’s pre 1990’s royalties, which can be concluded from a facts and circumstances analysis as laid out in this essay. In this day and age of punishing regimes for both income and capital gains, such an enormous tax free structure is an incredible achievement. However this is unsurprising given the beneficiary was a creative genius with a very smart business sense: David Bowie and hence the answer to the title Rock God or Tax Genius arguably should be “both”.

The Bowie Bonds came to the end of their life early in 2007 when they were liquidated and the assets returned to Bowie, but the Bowie Bonds’ role in the history of securitization is also worth note. The Bowie Bonds were successful arguably for the same reason that certain Credit Derivative Obligations (CDO), particularly CDO2 and their ilk were not. The Bowie Bonds were transparently structured, with clear sight of the underlying income generating assets, proven income track-record, most likely modeled for that income to decrease as well as increase and clear title ownership. The Bowie Bonds remain an interesting example of what was and was not wrong with where the securitization market went, and an argument for the merits of well-structured securitization products.

Download the paper from SSRN at the link.