The Story of Glenshaw Glass: Toward a Modern Concept of Gross Income

Abstract

This paper presents the story of Glenshaw Glass Company v. Commissioner, 348 U.S. 426 (1955), the leading case on gross income under the income tax. The paper examines prior doctrine (mainly, the attenuated legacy of Eisner v. Macomber), briefs, newspaper records, contemporaneous commentary, and current recollections of participants to illuminate how this case reached the Supreme Court, what strategies were pursued by counsel (for better or worse), and what choices the Supreme Court made in its resolution of this case. The Supreme Court's opinion in Glenshaw Glass is shown to be both sweeping and restrained. The doctrinal outcome is related to intellectual currents in play from the early days of the income tax to the present day in an effort to show why Glenshaw Glass, which was barely noticed at the time decided, has achieved its current high status. The doctrinal and institutional implications of Glenshaw Glass for current law and theory are also examined, giving due note to issues that were left unresolved. The basic thesis is that Glenshaw Glass completed the process of liberating income tax theory and doctrine from constraints imposed not only by other disciplines but also by traditional legal thinking, ushering in the "modern era" of an autonomous income tax.

The paper will be published as a chapter in a book to be entitled Tax Stories: An In-Depth Look at Ten Leading Federal Income Tax Cases (Foundation Press). Additional financial support for the project has been provided by the American Tax Policy Institute.