Tax exceptionalism and tax scholarship
Why is tax different from all other legal fields — or is it?
There are, of course, live doctrinal debates about the application of administrative law to tax guidance. Kristin Hickman has been a pioneer in spotting and examining the issues.
It seems to me that tax exceptionalism also may explain why the academic study of tax seems so different. Teaching in a law school, I am constantly struck by the disconnect between tax institutions, on the one hand, and the legal institutions that shape other fields. Just to take a few examples:
Start with the legislative branch. The Code is far more detailed than any other federal statute, and the Congress makes substantial changes every few years. The Congress also has deep knowledge in tax: consider the tens of economists and lawyers employed by the expert staffs at the Joint Committee, Senate Finance, and Ways and Means. By contrast, statutory law in so many fields is phrased in general terms and rarely changes. Think of the Wagner Act in labor law, or even environmental statutes. The point is that the legislative branch plays an especially active (and expert) role in revising tax law.
The administrative branch is also exceptionally active and expert. The IRS has hundreds of tax lawyers working on regulations, and the Treasury has tens of lawyers and economists. Together, they issue an exceptional volume of regulatory and informal guidance, which changes frequently as the law and the markets change.
By contrast, the judiciary is less important in tax than in other fields. To be sure, the courts sometimes decide critical issues with big dollars at stake. But most efforts to change the law look to the Congress and to the IRS and Treasury, rather than the courts. Changing the Code or the regulations is (often) far quicker and more accurate than litigating statutory language that may soon be outdated.
Constitutional law marks another front for tax exceptionalism. The Supreme Court’s rulings have constrained constitutional review in tax and other fields of law dedicated to distributive justice. The tax standing rules and the rational basis standard for review of tax and other economic legislation close judicial avenues for debate and reform that would be open to litigants in other fields of law.
(I once had a very serious and smart Yale student come to my office and point out a shortcoming in the EITC rules which, he worried, would deny benefits to deserving families. “We should bring a constitutional case!” he urged. He took it very well when I explained that there would be no ground for such a case but that the IRS might be responsive to a memo and meeting outlining the problem.)
A final institution is the marketplace. Taxpayers see the tax law, in the short run at least, as a zero-sum game. A dollar paid to Uncle Sam is one dollar less for me. The result is that thousands of lawyers and accountants spend their time trying to maximize tax savings. And the Congress, the IRS, and Treasury — outmatched in sheer numbers and in market knowledge — struggle to identify and shut down the latest schemes. My sense is that this dynamic is exceptionally strong in tax, though I’m not sure how to quantify the point.
But do these distinctions make a difference?
I suspect these exceptional institutions help explain why the academic study of tax has different priorities, methods, and audiences. Tax scholars tend to be reform-oriented and comfortable proposing major changes in the law. We often draw on economics and philosophy to make frankly normative arguments for legal change. Our work is broadly prescriptive and (often) forward-looking, because we reasonably expect the law to change — and can address a cadre of well-informed government experts.
By contrast, legal scholarship even in legislation and administrative law often (though not always) addresses the judicial branch and concentrates on the interpretation of existing law (rather than proposals for new law).
Speaking for myself, anyway, I sometimes find I have more common ground with economists and political philosophers than with law school colleagues. And my new tax students are typically surprised (in a good way) to find that tax is a policy field that “feels” very different from their other courses. I suppose one good thing about law schools is that they are methodologically capacious!
