Wed Aug 9 10:22:46 EDT 2006
Published by EH.NET (August 2006)
Robin Einhorn, _American Taxation, American Slavery_. Chicago:
University of Chicago Press, 2006. xii + 337 pp. $35 (cloth), ISBN:
0-226-19487-6.
Reviewed for EH.NET by Jenny Wahl, Department of Economics, Carleton College.
In June 2006, a group of 203 wealthy citizens in my state took out a
full-page ad asking for bigger taxes on high earners to raise money
for education, health, and public infrastructure. Most responses to
the ad -- including Governor Tim Pawlenty's -- have been negative,
sarcastic, and full of ridicule. Robin Einhorn, a history professor
at UC-Berkeley, would argue that these reactions are a legacy of
slavery.
While this might sound far-fetched, I think this is the main point of
Einhorn's book _American Taxation, American Slavery_. I say "I think"
because, frankly, this is a dense, difficult book that suffers from
repetition, a lack of structure, and a disconnect between evidence
and conclusions.
Einhorn claims that the antigovernment rhetoric we hear today,
particularly a clamoring for low taxes on the "elite," comes straight
from "the slaveholding elites who had no experience with democratic
governments" (p. 8). The last part of her book (chapter 6) asserts
that the uniformity clauses appearing in most state constitutions --
which prohibit preferential tax treatment -- are direct descendants
of slave-state law. What is more, these clauses are actually tools to
protect the wealthy rather than the instruments of equality intended
by constitutional conveners. As she puts it, the "mistake was very
significant. Misreading a defense of slavery as a defense of
equality, the constitution writers of the antebellum Northwest did
not even suspect that they were establishing privileges for their
homegrown elites. ... The[se] men ... simply did not understand" (pp.
204-05).
Whew. Were those guys dumb or what? But they weren't the only dumb
ones in Einhorn's story. So were their forebears who wrote and
ratified the U.S. Constitution: "Nobody knew what 'direct taxes'
were, how Congress would levy them, or who would benefit from the
apportionment rule" (p. 183). "Nobody seemed to realize that
apportioned direct taxes would be very difficult for Congress to
levy" (p. 173). And there's more: "Nobody ever knew exactly who paid
the tariff" (p. 155). "[N]obody knew exactly how its [the impost's]
burden would be shifted" (p. 148). "Nobody could know ... how the tax
[impost] would be shifted through the economy" (p. 163).
Oddly enough, earlier ancestors -- at least in New England -- seemed
to be pretty savvy. According to Part I (chapters 1-3), colonial
Massachusetts and Pennsylvania had an engaged populace with
democratically elected officials who created sophisticated schemes to
assess the value of property and tax it. In contrast, Virginia and
South Carolina were hotbeds of corrupt, appointed officials who
implemented primitive, flat-rate taxes that could "only be attributed
to the preferences of the 'masters'" (p. 93). Despite Einhorn's
reassurance that her book "does not try to catalog every colonial or
state-level tax measure" (p. 8), Part I seems to do exactly that. The
thesis for this section is largely appropriated from a report made by
Treasury Secretary Oliver Wolcott, Jr., in 1796: "Northern states
taxed larger ranges of objects in more sophisticated ways ... [due
to] the difference [in] the local government regimes" (p. 105).
Part II (chapters 4-5) is intended to bridge the colonial years and
the postbellum years. Here Einhorn spends a great deal of time
discussing the relatively minor differences between a tariff on all
imported goods (an "impost") and a tariff on some imported goods. She
claims that the tariff was adopted so people would not have to talk
about slavery. Yet, almost in the same breath, she notes that a
tariff is fairly easy to administer and collect. Could this be a more
salient reason the tariff came about? As to the reasonable point that
masters worried about the non-slaveowning majority imposing a tax on
their property, I would have liked Einhorn to use her own appendix on
tax incidence to explore why a tax on slaves would not simply have
been passed on to cotton consumers.
Einhorn would also have benefited from a glance at John Wallis's
thoughtful account of fiscal federalism (_Journal of Economic
Perspectives_, Winter 2000) if she wanted a logical frame for U.S.
tax history. Or she might have looked over Doug North's work on
transactions costs if she wanted to understand why some tax policies
pass and others don't.
But let's return to Einhorn's final arguments. Why would newly
established states in the Northwest look to Southern slave states for
guidance and, in their ignorance, adopt clauses at odds with their
goals? Well, maybe the attendees of constitutional conventions really
were dumb. Or perhaps judges were the evil ones, as she seems to
suggest on page 204 and pages 247-49. Or Tiebout's classic work on
local taxation could provide some useful insights: given the ability
of Americans to migrate freely, what we see across jurisdictions just
might reflect what constituents want.
Or possibly things are not quite as monolithic as Einhorn presents.
Ohio interprets its uniformity clause as permitting higher taxes on
resort property, for example, and Minnesota allows higher taxes on
polluted property and a graduated income tax under its uniformity
clause. Wisconsin does not permit property tax credits funded by
lottery proceeds to go only to owners of primary residences, because
this policy benefits only certain property owners. Wisconsin does,
however, allow school vouchers to be used for private schools under
its uniformity clause. Interestingly, however, Florida does not.
Maybe some states are not quite as bound to the venal slaveholding
past via their tax codes as others. Or perhaps Einhorn's comment that
"taxation has never been a major theme in [the] history [of slavery].
Nor should it be" (p. 201), is more valid when reversed.
Jenny Wahl, Professor of Economics, Carleton College in Northfield,
MN, is the author of _The Bondsman's Burden: An Economic Analysis of
the Common Law of Southern Slavery_. Her recent work includes "Stay
East, Young Man? Market Repercussions of the _Dred Scott_ Case"
(_Chicago-Kent Law Review_), "The Mismeasure of Man's Well-Being"
(_National Tax Journal_), and "Blacks, Whites, and _Brown_: Effects
on the Earnings of Men and Their Sons."
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