Witness to a Social Revolution, Through Tax
After almost 50 years of studying and teaching nearly every angle of domestic tax law, Professor Thomas R. White III maintains that "tax law is the most interesting and relevant course in law school."
For White, who will retire at the end of the spring semester, its draw seems obvious.
"It's the political way that you're divvying up the benefits and the burdens of society," White said. "Why wouldn't you be interested in this sort of thing? I think it's fascinating."
White, the John C. Stennis Professor of Law, has "taught just about every kind of tax course you could imagine, except international tax" — including classes focusing on divorce, retirement, estate planning, real estate finance and corporate tax. He co-authored a casebook, "Commercial Real Estate Transactions: A Project and Skills Oriented Approach," and has written numerous book chapters and articles on domestic tax policy.
In addition to his responsibilities inside the Law School, White also ventured into public service, serving in the Treasury Department and with the U.S. Congress' Joint Committee on Taxation. In the late 1970s, he worked with the American Bar Association Section on Taxation as they advised the Internal Revenue Service on simplifying domestic relations taxation.
Through these experiences, White gained a vantage point from which he observed social and policy changes that restructured fundamental aspects of American life, such as family, retirement and personal finances. Far from being an arcane specialty, tax law provided the context through which White could make sense of these social changes. As he says, tax law is "where the rubber meets the road."
From Physics to Policy
White was not always so sure of his calling.
He majored in physics at Williams College, but many of his family members were lawyers, so he decided to follow their example. After graduating from the University of Pennsylvania Law School in 1963, he joined his father's law firm, where he focused on tax law.
After a couple of years in private practice, White felt confined, so he decided to try public service. In 1965, he took a position as an attorney-advisor in the Office of Tax Legislative Counsel for the U.S. Treasury Department.
White found public service more engaging than private practice. His boss was Stanley Surrey, the assistant secretary of the treasury for tax policy.
"At the time, Surrey had a lot of discretion to make decisions about tax policy, much more so than I think you find in the Treasury Department now," White said. Mid-1960s Treasury Secretaries C. Douglas Dillon and Henry Fowler were "much more supportive of what the tax policy staff would do. More recently, policy decisions are often made in the president's office."
White had long been interested in teaching, and his work at the Treasury Department provided a segue into academia.
For academic institutions looking for new faculty members today "there's a much heavier emphasis on scholarship rather than on your technical expertise," he said. In the 1960s, however, law schools "obviously focused on scholarship potential, but you didn't actually have to have a background that reflected existing scholarship. So you were being hired to fill a substantive need for the law school that was talking to you."
White's hands-on experience with tax policy captured the attention of the UVA Law faculty, and he began teaching in the fall of 1967.
'The Young Guy'
At the time, two older faculty members, Edwin Cohen and Charles Davison, were the senior tax law professors. Cohen had been a long-time lawyer in the financial industry in New York City and Davison was a vice president at Southern Railway for 15 years. In comparison to these professors, White was "the young guy."
As White began his first year teaching income tax and corporate tax, he found that being the new professor required a great deal of flexibility.
"I was projected to teach a section on corporate tax, but most students wanted to take corporate tax with Ed, who, besides being more senior, also took more time to explain tax questions," he said. "Ed tended to cover material more gradually, so if the student decided to take corporate tax and didn't want to have anything move too quickly, Ed's section was the obvious choice. But I was thought of as someone who was a little more rigorous, and students chose to sign up for Cohen's section."
Only one student signed up for White's corporate tax course. He was undeterred by this setback and embraced the opportunity to work one-on-one. "I said alright, I'll do a tutorial," White said.
This left White with a light schedule. The dean at the time, Monrad Paulsen, noticed.
One afternoon, White was returning from lunch when he saw Paulsen waiting for him in the lobby of Clark Hall, where the Law School was then located.
"Monrad was standing behind the door and he was watching me and I said, 'This is not going to be good,'" White said. "There I was with one student in Corporate Tax and a section in Tax I. In Monrad's view, I was available. The next day I was teaching first-year students in a small section in Civil Procedure."
White acknowledged that he was a bit of a stop-gap for Civil Procedure at first, but he enjoyed the class and ended up teaching it for four years.
In 1972, White was awarded an American Political Science Association Congressional Fellowship, for which he took leave from the school. After the fellowship, he worked as a legislation counsel for the Joint Committee on Taxation for an additional year. When he returned to the Law School in 1974, he was on his way to becoming an established member of the faculty.
Catching Up With Social Change
Throughout the 1960s and '70s, social changes exerted great pressures on policy. White said the challenge with teaching advanced tax policy courses was keeping them updated, because "you're dealing with an area of the law that's developing and you have to keep an eye out as to what's going on in the world."
In the 1970s, he added, "there was this sea change in the substantive law of divorce."
In most parts of the United States prior to 1970, divorces could not be obtained unless one party could demonstrate that the other party was at fault for a dysfunctional marriage. Stringent requirements for proving fault led unhappy couples to look for loopholes in the law or to travel to states that had already adopted some form of no-fault divorce, such as Nevada.
In 1970, the National Conference of Commissioners on Uniform State Laws promulgated the Uniform Marriage and Divorce Act, which paved the way for no-fault divorce. Many states instituted all or part of the Uniform Act through the 1970s and '80s, and by 1985, New York was the only state that did not yet have no-fault divorce on the books. Partially as a result of the increased availability of no-fault divorce, the divorce rate doubled between 1965 and 1985.
"How the law applied to divorce and what were the roles of husband and wife and other aspects of the marriage relationship changed very substantially in that period of time," White said. "So, economically, you got a very different approach, to which the tax rules did not work very well."
White, who had long been a member of the ABA Section of Taxation and had been working on the ABA's project to revise the tax rules that applied to divorce, thought that attorneys and policymakers needed to modify the IRS code in light of changes in the economic rules that applied to divorces.
"Divorce is an estate planning issue," White said. "Divorce lawyers tend not to think of it as estate planning, but rather as a transactional situation where what you're doing is you're reaching a bargain on who's going to share in what part of the current resources of the divorcing couple without thinking about this long term."
Changes to the Tax Code on which the ABA task force had played an important part, including enactment of section 1041 covering transfers of property between divorcing spouses, were adopted in 1984 and again in 1986.
White's attention shifted to the ways that savings accumulated in retirement plans are allocated in divorce settlements. As divorce was becoming more prevalent, pensions were being phased out in many industries in favor of defined-contribution retirement accounts, such as 401(k)s. White began to research how the shift from pensions to brokered retirement accounts affected divorce negotiations.
"Now there's just a pot sitting there — a brokerage account," he said. "A big pot of money. That's where you see the fighting going on now."
Teaching and Publishing
White's research after working with the ABA Section on Taxation reflected what he had learned about divorce. He began to teach in the 1990s about retirement, age and divorces as they relate to tax. One of his interests recently is the current uptick in "gray divorce" — divorces between older couples in long-lasting marriages.
While White developed classes related to his research, such as Aging and the Law — which he taught with Professor Richard Bonnie '69 — he kept his interests broad. "Whenever you needed courses taught, I taught them," he said, displaying the flexibility that had served him well when Paulsen buttonholed him coming back from lunch.
White continued to work on his teaching skills, employing a variety of methods to keep his classes fresh. In his real estate courses, he liked to adopt a "hands-on approach."
"I assign problems and then I assign students to teams and the teams have to solve the problem," he said. "You have a very technical problem and you ask students to negotiate the kind of things you see in these transactions. So now you not only have to think about the economics of the deal, you have to think about how the tax affects that."
White also enjoyed bringing back former students who took his Real Estate course to talk to his classes about their experiences in the field. "I think it's rewarding for the students as well as for me to do it that way," he said.
In addition to his teaching role, White has long organized the annual Virginia Tax Study Group — bringing together tax alumni, faculty and other experts to discuss topical tax issues.
"Tom has played a very valuable role in helping the Law School to stay in contact with its tax alums, and tax professionals generally," said fellow tax professor George Yin.
Over the years, the tax law faculty at UVA Law proliferated, and White became the elder representative of a group that included Yin, Mildred Robinson, Paul Stephan, Michael Doran, Ruth Mason, Ethan Yale and Andrew Hayashi.
"I became sort of — I want to say — superannuated," White joked. "There's been a progression. We've always had a pretty strong tax faculty but we have more people now who teach tax than we've had in the past."
The Future of Tax Policy
As White approaches assuming professor emeritus status, he remains passionate about his interests in tax and continues to encourage students to take classes focused on aging and retirement.
Retirement policy is "one of the great problems that this country faces right now," White said. "We're getting a lot older and we have issues that involve substantive programs that benefit people who are old," such as funding Social Security and Medicare, he said. He is optimistic about the country's ability to navigate demographic changes, but he is concerned that issues related to the elderly do not receive enough attention at law schools.
After bearing witness to the drastic social and political changes of the past 50 years, White sees tax policy as intimately tied to the rest of society. "You now have a very sophisticated, economically advanced, heterogeneous society and a very detailed and elaborate tax system, which has all kinds of political overtones," he said.
Tax policy is likely to be a hot issue in the near future. Noting that the Trump administration and the new Congress have been hinting at tax reform, White said that reform is long overdue. However, he advised caution when considering sweeping changes to the tax structure, citing his observations of the relationship between policy and society.
"The thing about tax reform is, there are winners and there are losers. And the losers don't like losing."