Thursday, March 04, 2010

Tax Aversion and the Legacy of Slavery

Anti-tax "tea parties" are all the rage, at least in the United States. Perhaps they are not as fashionable as some might hope, but still making news. Much, if not most of the debate about them contains plenty of heat, but little illumination, and suffers badly from political polarisation. Still, we thought we'd add something to the mix, by referring to an article by Robin L. Einhorn of the Department of History at the University of California, Berkeley.

The article, Tax Aversion and the Legacy of Slavery, starts off by pointing out something that is well known about the Boston Tea Party, but appears to have been edited out by modern anti-tax Tea Partiers:

"The original revolutionary objection was never to taxes in general, much less to government in general. It was to taxation without representation and government by a faraway empire. The Boston patriots who threw the tea chests into the harbor were not calling for cheaper tea. They were demanding the right to decide for themselves, in their own colonial assembly, how to tax their own tea—and refusing to let somebody else's parliament decide for them. They would have been stunned to see their protests interpreted two centuries later as attacks on taxation in general. They had no interest in renouncing their own power to tax themselves."

Einhorn is the author of a book called American Taxation, American Slavery, which explores in depth - for the first time ever, it seems, the concrete policy decisions that slaveholders and non-slaveholders made in the critical realm of taxation. And this is where Einhorn gets interesting.

"Americans are right to think that our antitax and antigovernment attitudes have deep historical roots. Our mistake is to dig for them in Boston. We should be digging in Virginia and South Carolina . . . . the origins of these attitudes have more to do with the history of American slavery than the history of American freedom. They have more to do with protections for entrenched wealth than with promises of opportunity, and more to do with the demands of privileged elites than with the strivings of the common man."

How so? In short:

"Slaveholding elites feared strong democratic government as a threat to the institution of slavery."

Perhaps it's as simple as that. This blogger is no great expert in the history of U.S. slavery, but the arguments and well told and seem cogent. Einhorn asserts that her book is "the first modern study of the tax policies and debates of early American history" and we'd presume that this lends an authority to the book. We've skimmed a couple of reviews which challenge some assumptions, but not the central thesis. Einhorn is surely right to say:

"Political historians still often treat the persistence of slavery as a kind of exception in stories about the growth of liberty and democracy in the United States. This is a serious mistake. Slavery was a major institution in the American economy, slaveholders were major players in American politics, and major political decisions, such as tax decisions, always had to take these facts into account. To tell a story about early American political history that ignores slavery is to miss what often was the very heart of that story."

And one of the more nuanced arguments holds that:

"Isn't it obvious that a democratic society where "the people" make the basic political decisions will choose lower taxes and smaller governments? The short answer is no. In this democratic society, the people might decide to pool their resources to buy good roads, excellent schools, convenient courthouses, and an effective military establishment. But slaveholders had different priorities than other people—and special reasons to be afraid of taxes. Slaveholders had little need for transportation improvements (since their land was often already on good transportation links such as rivers) and hardly any interest in an educated workforce (it was illegal to teach slaves to read and write because slaveholders thought education would help African Americans seize their freedom). Slaveholders wanted the military, not least to promote the westward expansion of slavery, and they also wanted local police forces ("slave patrols") to protect them against rebellious slaves. They wanted all manner of government action to protect slavery, while they tended to dismiss everything else as wasteful government spending."

Again, without having the detailed historical knowledge to hand, this all still seems very reasonable. As does this next bit:

"But the crucial thing was the fear. Slaveholders could not allow majorities to decide how to tax them".

"Far from a democratic demand for local political autonomy, it was an antidemocratic rejection of all public power and public decision making. As a Virginia planter phrased it in 1829, opposing a reform that would have granted a nonslaveholding majority its fair share of seats in the state legislature, this was a flat-out rejection of anything that "put the power of controlling the wealth of the State, into hands different from those which hold the wealth." It was a flat-out rejection of democracy.

An interesting set of ideas. Read on. And comments welcome.


Blogger Physiocrat said...

Of course the stinking rich don't want to pay their dues, but with our system they manage to get away with avoiding them and it is the poor devils at the bottom of the economic heap who get hit hardest by the system we have.

No doubt you and Richard will be signing this petition for the reform that will bring all these scandals of avoidance, transfer pricing, non-doms, tax havens, IHT "planning", etc, to an end.

2:16 am  

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