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.”