Tribute

Windfalls Realized: Two giants of tax law retire

Photograph of Bill Andrews and Bernie WolfmanKathleen Dooher

APPRECIATED Bill Andrews, left, and Bernie Wolfman


How do we put a value on our (intellectual) capital gains? Or calculate the windfalls (to our minds) that have accrued from our original basis—in this case, from the date that William Andrews ’55 joined the Harvard Law School faculty in fiscal year 1961 and the moment, a few reporting periods later, when Bernard Wolfman arrived in 1976? We can’t—a perfect example of immeasurable, and invaluable, gains.

At the end of this past academic year, both scholars, who clarified the world of tax law for generations of lawyers over a combined 77 years, retired from teaching and joined their emeritus colleagues. Here, two former students pay tribute.

William D. Andrews ’55

On the right side of the equation

It can be lonely being a tax law professor. There are at most only a few dozen people who understand what you are doing, and most of them don’t much care. I have often times felt sorry for Bill Andrews—or, better put, for the world in which his gifts are not well (enough) appreciated. Bill himself would never say that—he is gracious, kind and seemingly always happy.

I first encountered Bill when I was a student in his corporate tax class. Many students did not quite “get” Bill. But I loved the class, and the professor even more. He was always in a bow tie and a suit that looked timeless, always willing to entertain a question or a badly incorrect answer, and make the best of it. There can be precious little logic in corporate tax—to this day, I cannot tell you, in any “deep” sense, why there is no boot in a B Reorg (years later, my students at Yale Law School would set this principle to a country-and-western tune)—but Bill would always try to find some.

Later I would teach from Bill’s basic tax casebook, and his spirit would come back in full. Where else could you see Zeno’s paradox, used to explain the concept of a “tax on a tax,” in the Old Colony case, complete with the answer that some infinite series converge?

There is much to admire about Bill’s scholarship, but what I best know and love Bill from are three articles published in the Harvard Law Review, in 1972, 1974 and 1975—known to cognoscenti simply as Andrews 72, 74 and 75. Much of income tax theory in the 20th century was dominated by the so-called Haig-Simons definition of income, which holds essentially that Income equals Consumption plus Savings (I = C + S)—that all money or wealth (income) is either spent (consumption) or not (savings). Many have written about the income side of that equation: the importance of finding and taxing “all income, from whatever source derived.” The simple genius of Bill Andrews was to look to the right-hand, or uses side. What we are taxing—in an income tax—is consumption plus savings. This change of perspective effected a Copernican revolution in our thinking about tax. Andrews 72 pointed out that, while the arguments for source neutrality are compelling, those for use neutrality are far less so—just maybe, “we” do not want to tax all consumption, like medical expenses or charitable contributions, equally. Then, Andrews 74 showed that the “worst inequities and distortions” derived from the inconsistent tax treatment of savings. The contemporary consumption tax movement was born. Andrews 72 and 74 are my favorite law review articles of all time, but they deserve a far better compliment than that.

The last time I saw Bill was at a 30th birthday party for Andrews 74. (How many law review articles have birthday parties? How many of these are on tax?) Bill held up a copy of my book “Fair Not Flat” (my homage to him, more truth be told) and said to the assembled dozens: “There is a man who has written a book I wish I’d written.” The students, still puzzling over the equivalence, in present-value terms, of a tax deferred and a tax paid, barely took notice. But I did, and thought to myself, That’s the best compliment I’ve ever gotten.

Bernard Wolfman

A man of more than general utility

Bernie Wolfman has taught generations of tax students, and he will continue doing so for many years to come. I know that he has just announced his retirement from Harvard Law School after 31 years (and, including his time at Penn, a total of 44 years of teaching), and I have no knowledge of his future plans. But even if he retires to Tahiti incommunicado, he will be teaching students nonetheless because many of those he taught—I among them—will be teaching them. And as I learned tax, so I teach tax—or at least I hope it to be so.

Bernie was a magnificent teacher and a master of the Socratic method. While today’s students are less exposed to that style of teaching, for those of us who learned from it, it was a thrilling experience. Phil Areeda ’54, Paul Bator ’56 and Bernie Wolfman were the three masters who (it seemed) barely spoke in class, and yet the learning was nonstop: We learned by doing rather than by watching, and many of us learned not only the law but a love of teaching. The Socratic method can impose harsh demands, but Bernie was not at all harsh; on the contrary, he was kind and treated us kindly both inside and outside the classroom. For those of us who teach tax, Professor Wolfman is our ideal.

He taught me many things, the most often repeated of which was that the General Utilities doctrine corrupted subchapter C and had to go. We began in those days with corporate liquidations, a starting point that made great pedagogical sense in the era of General Utilities. Bernie’s corporate tax casebook was all about the General Utilities doctrine, and the book was used everywhere and always to good effect. We spent most of a semester learning how Congress tried to rationalize the taxation of corporations and their shareholders, and how that effort failed—had to fail—because of General Utilities.

And we learned that the tax bar was working hard to eliminate this peculiarity even though it reduced the taxes of the bar’s most sophisticated clients. In 1986, General Utilities met its overdue demise. I learned from its repeal that the tax bar has an obligation to improve the law and that the members of the tax bar take that obligation seriously. I learned that theory matters, that lawyers can be a force for legal change and especially for positive legal change. I learned many things from Bernie Wolfman and this was as important as any.

When I left Harvard Law School to clerk at the Tax Court, Bernie put a book in my hands: a history of the old Board of Tax Appeals and how it was transformed into the modern United States Tax Court. I was becoming part of an institution, and to understand what that institution was, I had to know what it had been. The tax laws, the tax profession, the tax academy—all are institutions. To know what they are, know first what they have been. I learned that from Professor Wolfman.


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