The obstacles the Biden administration now faces in its efforts to pass a radically scaled down version of its “Build Back Better” bill have reignited an old debate in US political history: Why have tax increases and robust social investment proved so difficult to implement in this country? In recent years, a number of historians, including Ariel Ron and Robin Einhorn, have sought to answer the question by pointing to the legacy of American slavery. They argue that widespread hostility to taxation and government spending grow out of a long-standing American commitment to white supremacy and that the connection was forged in the slave South.
Ron, in a recent piece for Slate, drew a straight line between the proslavery politics of Southerners such as John C. Calhoun in the decades prior to the Civil War and the obstructionist tactics of today’s Republican Party. Concerned above all with protecting the institution of slavery from interference by national authorities, Ron argues, Calhoun and other Southerners became staunch opponents of federal activism. A government that had the capacity to build infrastructure and shape the economy, they feared, might also emancipate the slaves. Republicans in Congress today, Ron suggests, are operating from the same antidemocratic priorities and commitment to racial hierarchy. Not coincidentally, their electoral heartland is composed of the former states of the Confederacy, and they are similarly working to protect white elite power from redistributive government action. As Ron puts it, “Calhoun died in 1850, the Confederacy in 1865. Yet the politics of austerity endure.”
Einhorn has advanced a similar diagnosis. Rather than looking for the roots of American austerity politics in places like Pennsylvania or Massachusetts — in events like the Boston Tea Party — she argues, “we should be digging in Virginia and South Carolina.” Slaveholders saw little need for robust public spending on infrastructure or education. They perpetually worried about the prospects of nonslaveholding majorities wielding the power to tax their human property and thus did their best to cut down the government’s revenue-raising authority. To this day, she writes, the weakness of the American state’s fiscal powers is “part of the poisonous legacy we have inherited from the slaveholders who forged much of our political tradition.”
These accounts are part of a larger scholarly fashion for tracing today’s ills back to the South. In this view, the ghost of Calhoun continues to loom long after Appomattox, and the venom of slavery is inescapably passed down decades after Emancipation.
Tea Party Yankees
This interpretation is not without merit. The rearguard objections of scholars such as Sean Wilentz and Gordon Wood notwithstanding, slaveholders indeed had foundational influence on the legal and political institutions of the United States at the country’s inception. Slaveholders’ fears of an overweening federal government are in part responsible for the particularly decentralized and rigid political order of the United States. Commentators are not wrong to point out that these structures had resilient effects.
But there are major problems with what has become a monocausal and flattened interpretation of US history. Yes, Southern politicians helped make progressive taxation and robust government spending complicated to enact, but proslavery ideology was not the only and certainly not the most important source of anti-tax politics in the United States. Such claims skip over some of the most important episodes in the political development of the United States — including the enthusiastic embrace of laissez-faire among Northern elites after the Civil War as well as staunch support in the South for the creation of the progressive federal income tax — the government’s most important source of revenue in the twentieth century.
In other words, New York Times and Slate readers hardly need to venture all the way to Dixie to uncover deep-seated American strains of antidemocratic and anti-tax politics. To understand our current politics of austerity, we are better served to explore not the defeated ideology of slaveholders but the triumphant politics of liberal elites in the Northeast.
Indeed, the ink had barely dried on the Confederacy’s surrender when affluent New Yorkers and New Englanders — manufacturers, merchants, and financiers — began to campaign against the political power of the poor in the industrial North. In the aftermath of the war, urban workers became ever more adept at using the machinery of government to raise taxes, increase municipal budgets, and alleviate poverty — developments that, in reaction, triggered one of the foremost anti-taxation, counter-majoritarian, “small government” movements in American history. As historian Alex Keyssar has documented, the campaign was endorsed by the country’s leading intellectuals and public figures, often Ivy League–educated, who openly voiced deep hostility to tax hikes stemming from universal suffrage. Many of these men had fought against slavery, but they nevertheless decried the extension of the franchise to non-propertied citizens and their ability to redistribute private wealth via taxes.
The hostility of these urban elites to “universal manhood franchise,” though not free of racism and ethnic prejudice, had little to do with the legacy of slavery or with white supremacy per se. It was instead grounded in their analysis of the new massive inequalities generated by industrial capitalism. In a choice between political democracy and an economic system that produced unprecedented disparities, these men stood firmly with the latter. Writing in exclusive organs such as the North American Review and Atlantic Monthly, they lamented the “severance of political power from intelligence and property” and the rise of a “political system in which power was . . . lodged in the hands of the proletariat.” Driven by their overblown fears of a “communistic attack on property” via taxation and labor rights, they called for the universal right to vote be reversed.
The most prominent effort to eliminate voting rights of the propertyless took place in New York state in 1875, when the bipartisan “Tilden Commission” proposed a constitutional amendment to curb “the excesses of democracy.” Faced with an increase in spending, taxes, and municipal debt, as Sven Beckert has shown, the commission proposed to move control of city governments to boards of finance that would be elected exclusively by property holders. The commissioners asserted that “the choice of the local guardians and trustees of the financial concerns of cities should be lodged with taxpayers.” Business organizations such as the Chamber of Commerce and the New York Stock Exchange rushed to advocate for this proposal and were soon joined by organs such as the New York Times, Harper’s Weekly, and the Nation. Despite the support of these powerful institutions, working-class New Yorkers and the labor movement were able to defeat the measure, which would have disenfranchised large portions of the electorate. Elites then turned to other, more mundane methods to “purify the ballot box” — registration laws, literacy tests, prolonged residency requirements. In ways that anticipated the encasing of the market in our own neoliberal age, they insidiously worked to insulate government policy from democratic control. In this context, it was Northern publicists who often lectured to their white brethren in the Reconstruction South (who, of course, needed little advice) that “wise, capable, provident, and frugal rule” could never be compatible with universal suffrage.
Taxing the Rich
As historian Amy Stanley has explained, antidemocratic and anti-tax convictions among the affluent stemmed not from their stubborn commitment to slavery but, perhaps surprisingly, from its abolition. Advancing their own version of liberty in a post-emancipation society, elite Northerners came to see any form of government assistance or support for the poor as nurturing a form of dependence, reminiscent of the subservience of slaves in bondage, that had no place in a free society. Any type of public support threatened to remove the stigma associated with economic reliance and destroy the dependent’s “habit of industry.”
Whereas earlier rank-and-file conceptions in the age of Lincoln associated free labor with broad access to property and opportunity, these self-styled elite “reformers” now defined it narrowly as one’s choice to buy and sell one’s labor in the marketplace. They defined freedom of contract as the antithesis of bondage and the epitome of liberty. Laissez-faire was thus the brainchild not of enslavers but of slavery’s bourgeois opponents. It led these social groups not only to embrace social Darwinism — the application of Charles Darwin’s ideas of natural selection to society — but, ironically, to greater support for police forces and punitive government action against the poor. These policies were implemented not only in the cities of the North, where vagrancy laws criminalized poverty, but also in the postwar South, where federal authorities denied public relief to former slaves if deemed fit to labor and compelled them to sign exploitative contracts with their former masters.
Given the immense industrial fortunes that were accumulated in places such as New York and Boston in those decades, it is not surprising that support for a progressive income tax began to emerge on the country’s agrarian periphery, in the West and the South. As scholars such as Monica Prasad and Elizabeth Sanders have demonstrated, the political drive for an income tax drew support from radical farmers’ movements of the late nineteenth century — the Grange Movement, the Greenback Party, and the Southern and Northern Alliances. The Populist Party enjoyed strong support everywhere but the Northeast. It included an income tax in its 1892 Omaha Platform, alongside other demands designed to regulate corporations and combat inequality. Industrial interests warned that income taxes would lead to the growth of an “inquisitorial” government and set the country on the road to socialism. These early efforts to pass a federal income tax began a twenty-year struggle.
In 1893, Southern and Midwestern Democrats in the House introduced a federal income measure that was soon declared unconstitutional by the Supreme Court. The justices from the Northeast voted against the tax; justices from the South voted in favor of it. In 1913, a constitutional amendment enabling income tax finally passed, with the Southern states, alongside other agrarian states, leading the way. As Einhorn herself has meticulously documented, opponents of the income tax in the South deployed the “Lost Cause” of the South argument in their attempts to crush the amendment. Harking back to the antebellum years, they warned voters that an empowered federal government might step in to challenge Jim Crow.
But these tactics failed. Of the first nine states to ratify the amendment, seven had been slave states (Alabama, Kentucky, South Carolina, Mississippi, Maryland, Georgia, and Texas). This was hardly an unambiguous victory for “democracy” in a segregated South, but it demonstrates that Calhoun’s anti-statist theories mattered less than the severe impoverishment of the region in those decades. It also shows that Southern oligarchs did not speak for the region as a whole. “Southern” traditions were as varied and contradictory as those of the North.
The long-term implications of the amendment were profound. Efforts in the 1920s to replace the income tax with regressive sales taxes failed. As a result, when the United States embarked upon the creation of the New Deal state, it was financed heavily by an income tax, whose base was gradually broadened to include a wider population of taxpayers, even as its progressivity remained intact. As economist Thomas Piketty has pointed out, the top federal income tax in the United States averaged 81 percent between 1932 and 1980, far surpassing the rates of continental European countries such as France and Germany. These decades of high redistributive tax policy, while far from perfect, belie notions of the United States as irredeemably anti-statist in ways that had been dictated by the founding generations.
In light of a long and dynamic history filled with reversals and ironies, it is doubtful that hostility to taxation and government spending in American politics can be pegged on any particular period or region. The impact of the slave South on the development of American institutions has been profound, of course, as has been the resilience of racism. But, as historians have demonstrated, these legacies evolved in complicated ways over time.
When politicians today whittle down social spending, and as they preach for fiscal responsibility and against a culture of “entitlements,” they draw on a rich vocabulary that owes as much, if not more, to the liberal Northeast than to “the South,” to industrial capitalism than to plantation slavery. To displace our challenges to the supposed lasting influence of the Confederacy does a disservice to our public debate, blinding us to how political alignments, not historical legacies or immutable ideological commitments, drive policy.