Tax at Osgoode Hall Law School

 

Richard Bird passed away suddenly on Wednesday June 9, 2021.

It's hard to imagine.  He has been in my professional consciousness for as long as I've had one and our collective consciousness for much longer as a leader in taxation and public finance, in Canada certainly but also in the world.  There are few scholars more distinguished than he in our field.  We wrote together occasionally.  He visited one of my classes a few months ago.  Our conversations, no matter how separated in time, always seemed to resume effortlessly where they last left off.

I would like to remember Richard, in a personal way that I think, I hope reflects two of his most significant contributions to my, to our professional lives and indeed to our fiscal life and through them to our fiscal condition that animates the rest of our civilized existence.

 

Curious, Passionate, Thoughtful, Straightforward and Direct

Richard was - and in my memory is and will remain - a good and generous friend, a colleague, an occasional writing partner, and most of all an inspiration in our field of taxation and public finance.  He was uncontrollably and persistently curious, and possessed one of the most open and intellectually honest minds I have ever encountered.  I remember meeting him in his office at the start of our first shared writing project approximately twenty five years ago.  I had made a metaphorical reference to contract law in our discussion about about how countries and their tax systems intersect  in what is euphemistically but inaccurately described as "the international tax system". To make my point I referred to the apocryphal (or so those of us at the time thought) movie known well by law students of the 1970s, The Paper Chase.  It starred John Houseman as crusty Harvard law Professor Kingsfield; I referred to Kingsfield's description of a contract not as evidencing the "agreement" of the parties but rather the limits of their "disagreement".  I suggested that Richard and I think of tax treaties that way, the intersection of two sovereignties, each in its own interest, without displacing the other.  That legal perspective intrigued Richard, for our purpose.  We spoke a while and then, suddenly  remembering something he had once written he thought was connected he said, to paraphrase:  "You know I wrote this [whatever it was, I don't recall] ten years ago.  I was wrong."  And he and we moved on.  That was Richard, his curiosity was not invested or constrained by ego but by the joy of his subject and the energy of conversations about it, which he followed as they took him.  And, I'll suggest that rarely was he "wrong".  But the honesty of his inquiring mind freed him to think expansively and creatively and to express himself in straightforward ways that penetrated to the core of thorny tax and public finance issues.  He was very good at pointing out when the emperor in the parade was undressed.

 

Two Things - Among So Many

This is an apt juncture to mention two things, among many others, that make him remarkable.

 

Richard Embodied Our Modern Income Tax System From Its Beginning  - Really

Without romanticizing too much, he was a professional "great grandchild" of Edwin Seligman, the American Scholar of the late nineteenth and early twentieth centuries who is generally regarded, with his colleague Thomas Adams, as a parent of modern income tax, from whose we adopted our notions of income tax and its earliest comprehensive modern formulation in the Income War Tax Act 1917.  Seligman was also one of the "four wise economists" appointed by the League of Nations in the early 1920s to study and make recommendations about how countries' tax systems should intersect in what for then was seen as an increasingly "globalized" trading world in the wake of  World War I.  Seligman is regarded in this role as a parent of  "the international tax system" as we know it, a parent among the four who with one other is thought to have done much of the heavy lifting.

How does this relate to Richard.  Edwin Seligman was the inspiration for and the original leader of what some including Richard have referred to as the "Columbia School of Public Finance", referring to the Economics Department at Columbia University.  It was from there that much of the important thinking about public finance and its exponents fiscal and tax policy are thought to have originated in their modern manifestations.

Richard's PhD is from Columbia.  But, there's more.

When Richard spoke and wrote, those who listened and read closely could and would hear and read Seligman speaking too. But, it gets better; Richard's fiscal genes were even more directly connected.  Seligman was a colleague of Robert Haig (of the Haig-Simons notion of "income") of whom Carl Shoup and William Vickrey were students and colleagues, all of Columbia and the "Columbia School".   But Shoup and Vickrey were not only colleagues of and collaborators with Richard; Shoup supervised Richard's PhD and Richard was a colleague of and worked with Vickrey.  In my professional imagination, when Richard spoke, I knew I was privileged to listen to the modern legacy of income taxation actually speaking through its influence on Richard as he was exposed to it by its progenitors:   Seligman, Haig, Shoup, Vickrey, Bird.  He was they; and they were him.  And he became one of those progenitors too as his work has influenced the world during his career, in his roles at or with the International Monetary Fund, the World Bank, the Organisation for Economic Co-operation and Development, the United Nations, and as a consultant to countless minsters of finance around the world particularly in developing regions of the world which held a special professional and personal interest for him.  When Richard spoke to one of my classes in February this year, he numbered those ministers at sixty-nine.  His professional contribution to Canada's formulation of income taxation included work relatively early in his career that he did for the Carter Commission.

It's a remarkable thing to see Richard as both an embodiment and an exponent of our field that he influenced so much.  Those who are interested can see some of this chronicled in a paper by former Indiana Unvivrsity Maurer School of Law and now Northwestern University Pritzker Law School Professor Ajay K. Mehrotra:  From Seligman to Shoup:  The Early Columbia School of Taxation and Development, Research paper Number 207, Maurer School of Law, Indiana University, Legal Studies Research Paper Series,  published as a contribution  in The Political Economy of Transnational Tax Reform: The Shoup Mission to Japan In Historical Context (W. Elliot Brownlee, Yasunori  Fukagai & Eiasku Ide, Eds. (2013)).  In the paper Mehrotra says the following, which I invite to be considered in thinking about Richard, the lineage of which he is a part, and the profound depth of his research, thinking, and legacy:

"Although public finance scholars have long recognized that [Carl] Shoup was "following in the grand tradition of his illustrious predecessors at Columbia," [noting for this observation Richard M. Bird and John G. Head, eds. Modern Fiscal Issues:  Essays in Honour of Carl S. Shoup (University of Toronto Press), vii] few have attempted to analyze the historical antecedents of Shoup's ideas and actions...  This essay attempts to delve deeper into the links between the early Columbia institutionalist strand of taxation and development and Shoup's political economy of public finance.  It chronicles how Shoup's efforts to improve and reconstruct fiscal systems stemmed mainly from his Columbia training, particularly from his interactions with his two leading mentors, Robert Murray Haig and Edwin R. A. Seligman.  The essay's goal is to show how the intellectual orientation of the Shoup mission ["to reconstruct the Japanese fiscal system" after World War II] - particularly its commitment to tax justice and its self-confidence in exporting American economic ideas - emanated from a long Columbia tradition of using tax policy to guide economic and political development."

Writing in 1989 honouring Carl Shoup in a paper that also recognized and lauded another public finance luminary, Richard Musgrave, Texas A & M  University Mays Business School Professor Emerita and Texas A & M School of Law Professor Lorraine Eden offers more insight into Richard's fiscal genes in Retrospectives on Public Finance:  An Introduction to the Issues (in Lorraine Eden, ed., Retrospectives on Public Finance, Duke University Press (1991)).

Professor Eden wrote, including a direct reference to Richard among storied company:

"Carl Shoup and Richard Musgrave have trained and been colleagues with over two generations of public finance specialists, including Richard Bird, Sijbrn Cnossen, John Due, Lyle Fitch, Irwin Gillespie, John Graham, Richard Goode, Lowell Harriss, John Head, Peggy Musgrave, Charles McLure, Jr., Hirofumi Shibata, and William Vickrey, to name just a few.  Their research spans the entire field of public finance, from the theory of pubic goods to the integration of the personal and corporate income taxes to macroeconomic policy to fiscal harmonisatization.  These economists believe in a practical approach to public finance, one that uses theory to design realistic fiscal structures."  

 

Taxation Is Practical, Tax Administration Matters

Richard believed and advocated that all the policy in the world was not very useful unless it worked, was fit for purpose in the context in which it was meant to apply, and was administrable.  Note the reference in Professor Eden's remarks to "a practical approach to public finance" in the school of thought in which Richard grew, a timely thought it might be said when we think of BEPS and Pillars and the like.  This is the other aspect of Richard of which I think all the time.  Taxation is practical, it has to work, not just in theory but as it can be and is administered by tax administrations constrained but also enabled by their unique resources and capabilities.

Speaking on a panel at  National Tax Association meeting in 2006 honouring Richard Bird for his "outstanding contributions to the study and practice of public finance", Stanford Emeritus Professor and Hoover Institute Senior Fellow Charles E. McLure, Jr., focused on this ever present practical direction of Richard's thinking.  Professor McLure's words, with reliance on a vivid golf metaphor, bear repeating:

"... I want to focus on Richard’s insistence on particular ways of thinking, which I believe should be at the very heart of the study and practice of public finance but which are, unfortunately, too often ignored.  I will quote liberally from Richard’s writings to
document my case.

“You must play the ball as it lies. You may not move
it to a better spot.” – The Rules of Golf

Although I know that Richard believes the study and practice of public finance is much too important to be considered merely a game, one of the fundamental rules of golf describes quite well Richard’s approach. The rules state simply, “You must play the ball as it lies. You may not move it to a better spot.” 

Some members of our profession play the “game” of tax policy and analysis as though always in the middle of the fairway with a clear and unobstructed view of the green and no water hazards and no sand traps. But, as Roy and I have, Richard has spent much of his professional life playing in the rough – in developing countries and in countries in transition from socialism, where there are few unobstructed views and many institutional traps and political hazards. Richard insists that, rather than assuming away the nasty nitty-gritty that makes analysis of policy options difficult, one must “play the ball as it lies,” dealing with the world as it is, not as we would wish it to be."

And related to Richard's insistence that tax theory be capable of being practical, Professor McLure noted the importance Richard attached to the administrability of tax systems.  Professor McLure continued, adopting some of Richard's own words - and I cannot resist to note the oddly timely reference to "global income tax" in Richard's own words:

"“Tax administration IS tax policy.” – Milka Casanegra (1990)

The need to play the ball where it lies is no greater than in the area of tax administration. Just as Milka Casanegra famously said, “tax administration IS tax policy,” Richard has said, “No policy exists until it is implemented” (Bird, 1989, p. 326). He notes, “Academic economists discussing policy issues sometimes sound as though they are, in effect, advocating that the way the world works should be changed to fi t the conditions assumed in their models. Tax reformers discussing the need to change the institutional context within which a tax system functions often sound equally futile.” (Bird, 1989, p. 320)

By comparison, Richard wisely asserts, “[T]he most rewarding approach to tax reform in most countries is likely to be to design a tax system that can be acceptably implemented by the existing weak administration. Miracles being always in short supply, any other action is, in the end, unlikely to prove successful.” (Bird, 1989, p. 315)

One implication of this view is not to let the perfect be the enemy of the good. Thus, regarding the impulse to introduce a global income tax, Richard advises:

[T]hose who would design a better direct tax system ... should realize that the economic and administrative realities are such that what is really being done is to design a schedular tax. The tax analyst who approaches his task in this way is unlikely to make the same reform proposals as one who does not so take into account the way the world works” (Bird, 1989, p. 329).""

 

To Close

Richard's legacy is rich and his lessons to us many.  He and his memory connect us in profound, seamless, and sinewy ways to taxation's modern origins and its continuing imperatives.  Just this realization and seeing Richard in this light, are arresting.  And Richard's constant reminder that taxation is practical, that it doesn't work unless it works, bears constant reflection - particularly as our international tax world seems to want to reinvent itself with impenetrable complexity in the image of a pseudo single global corporate income tax "system".  In these ways Richard stays in my consciousness, and I think will continue to enliven all our professional lives as an influence on our thinking - a reminder of  the reality taxation and public finance and,  recalling his work in the developing world,  of the connection of tax to justice.

 

- Professor Scott Wilkie (Distinguished Professor of Practice, Osgoode Hall Law School)