50 Years and Counting
I hope that you, dear readers, will indulge me in a little flight of nostalgia in this report – July 1, 2019 marks the 50th anniversary of my starting work in the tax area and August 1, 2019 the 50th anniversary of my joining the Canadian Tax Foundation.
After graduating from Harvard Law School (how I got there from London, Ontario is another story), I started work as an assistant professor at the Faculty of Law, University of Western Ontario on July 1, 1969. That was a good thing because my job prospects as a Canadian with a Harvard Law degree were quite limited. I did not have permanent residence status in the United States (the Vietnam war was raging and I did not want to become eligible for the draft) and all of the US states had residence requirements for the practice of law; therefore, the only opportunities for me were to work in a corporate legal department. In Canada, my prospects were even worse – I could not take the bar admission course and practice in Ontario because at that time Harvard was not an accredited law school for purposes of the Law Society of Upper Canada.
It was very fortunate for me that, when I was home in London for the Christmas break during my third year of law school, my old football coach, who taught at Western’s law school and was the acting Dean, offered me a position as an assistant professor. I accepted on the spot.
Originally, I was hired to teach Evidence, Land Development, and Trade Regulation. I had taken Evidence and Antitrust law at Harvard and thought I could get up to speed on the Canadian law over the summer. But I knew nothing about Land Development; my first-year Property course had exposed me to topics such as adverse possession and the ownership of wild animals, but nothing that was remotely relevant to modern real estate law, even in the United States. I look back with horror at the damage that I must have inflicted on my students in the two years that I taught Land Development.
In May or June 1969, as I was finishing at Harvard, I received a call from the newly appointed Dean (not my old football coach) who informed me that the law school’s needs had changed and that I would also be teaching income tax. I was shocked. I had taken a basic course in income tax at Harvard but, obviously, it dealt with US tax. I knew nothing about Canadian tax and the prospect of teaching tax, a course based on a large complex statute rather than a case law course like Evidence, was distressing. However, I was in no position to negotiate so I spent my summer trying to prepare some teaching notes for a course on Canadian income tax.
That first tax course is not an experience that I look back on fondly. Without exaggeration, I was one step ahead of the students in preparing the classes. I could not relate the material covered in one class to the material in a later class because I hadn’t prepared for the later class. And thank God for the Socratic method – I hid my ignorance by posing questions and answering students’ questions with more questions. However, the students were very forgiving, and I learned an enormous amount even if they didn’t.
And as terrifying as the experience was, to my surprise, I learned that tax law was fascinating. It raised issues as broad as the legal system and society itself. It is by far the most important point of direct interaction of a country’s citizens with their government and raises fundamental public policy issues and issues of statutory interpretation, tax planning and tax administration.
In short, I came to realize over the next few years that tax was an excellent vehicle for students to learn a variety of analytical skills which would serve them well in whatever future endeavours they chose. Gradually, I fell in love with the subject. After a while I realized that I couldn’t do tax properly on a part-time basis and by the time of my first sabbatical in 1975 I had decided that I wanted to do tax exclusively.
I became a member of the Canadian Tax Foundation as soon as I started teaching. It was – and still is – the best bargain going: the Canadian Tax Journal, the Conference Reports and, at that time the books, all for a very modest annual fee (reduced for academics). Furthermore, the Foundation was and still is the leading (at that time the only) independent Canadian tax research organization. For me the Journal and the Conference Reports were invaluable sources of information. I remember the first annual conference I attended in 1971 in Toronto, being so impressed by the presentations from the biggest names in the Canadian tax community – Doug Sherbaniuk, Carl Steiss, Wolfe Goodman, Glen Cronkwright, Stan Edwards, Bob Lindsay, Ron Robertson, Pat Thorsteinsson to name a few.
I started to write about tax. My first article was about the child care expense deduction and, fittingly that article – the first of many – was published in the Canadian Tax Journal in 1973 (“Section 63: The Deduction for Child Care Expenses” (1973) vol. XXI, no. 2, 176 – 182).
With no business or accounting background, I realized that I needed to learn something about accounting principles and their role in the tax system. This led me to the presumptuous idea that writing a book about the measurement of business profits for tax purposes would be a good way to learn about the relationship between accounting and tax. For some reason, Doug Sherbaniuk, the Director of the Foundation at the time, was willing to take a chance on me and I spent the next 7 years writing Timing and Income Taxation.
There’s some truth in the saying “timing is everything” and the timing of my entry into the tax field was auspicious. The 1967 Carter Commission Report was still a hot topic when I started teaching. Then Finance Minister Edgar Benson’s 1969 White Paper on Tax Reform and the 1971 tax bill and legislation were huge events, both at the time and in hindsight. It is difficult to exaggerate the scale and impact of a completely new tax system. For the old guys (and they were all guys) it was devastating; many of them simply gave up. But for young guys just starting out, it was an incredible opportunity.
As I look back on the past 50 years, which I do quite often these days (a sure sign of growing old) I am struck not only by the obvious things – how fast the time has gone and how much things have changed – but also how resilient the 1972 Income Tax Act has been in coping with all the legislative, economic and societal changes, as well as the dumb demands of politicians for it to do things that it should never have been expected to do.
But what stands out more than anything else is the wonderful people I have encountered during my half-century of tax: the tax students who have given me their time and attention (as well as decent teaching evaluations) and who rarely complained about the workload or their grades; and my professional colleagues from Canada and abroad, from universities, practice and government, some of whom have become treasured personal friends and most of whom are decent, hard working and unassuming people. I have previously bemoaned the fact that tax people do not appreciate and celebrate how extraordinary they are, which of course is part of their charm. I have been blessed to work with extraordinarily intelligent tax people over the years – Al Short of the Department of Finance, Bob Brown of Price Waterhouse, David Ward of Davies, Ward & Beck, Stanley Surrey of Harvard Law School and former US Assistant Secretary of the Treasury, Albert Raedler, German Professor and tax practitioner, John Tiley of Cambridge University – to name just a few who are no longer with us.
50 years is a long time to do anything. Although I got started in tax by accident, I have no regrets about it. Some folks (especially those who don’t like what I write in my reports) may suggest that after 50 years it’s time for me to pack it in. But as I move into my sixth decade of tax, and as an old friend continually reminds me “I’m running out of runway,” I say, as long as I still love what I do and get asked to do things why would I stop.
Finally, dear readers, a simple but heartfelt thank you for allowing me to write these reports for the past 9 years. It’s my dream job and I don’t want the dream to end just yet.