Tuesday, November 27, 2012
George K. Yin
(Virginia) presents James Couzens, Andrew Mellon, the 'Greatest Tax Suit in the History of the World,' and Creation of the Joint Committee on Taxation and Its Staff at Boston College today as part of its Tax Policy Workshop Series hosted by Jim Repetti and Diane Ring:
In early 1924, James Couzens was a Republican Senator from Michigan and
reportedly the richest member of Congress. Andrew Mellon was beginning
his fourth year as Secretary of the Treasury — a service that would
eventually span 11 years under three Republican Administrations — and
one of the wealthiest persons in the entire country. This article
describes how a feud between these two men, an ensuing investigation led
by Couzens of the Bureau of Internal Revenue (BIR) (predecessor to the
modern-day IRS), and a tax case against Couzens that was described as
the “greatest tax suit in the history of the world,” helped lead to
creation of the U.S. Joint Committee on Taxation (JCT) and its staff.
The events — filled with political intrigue, backstabbing (real or
imagined), and unintended consequences — antagonized Congress’s
relationship with the executive branch, but improved cooperation between
the House and Senate, and both were instrumental in the JCT’s creation.
The story also provides insight on the unique role the JCT has played
in Congress for over 85 years. Finally, the article explains how
creation of the JCT became entangled with two of the most contentious
tax issues of the day — the publicity of tax return information and the
depletion allowance for oil and gas production — and played a role in
changing the law in both areas.