Review of the Book:

American Taxation, American Slavery
by Robin L. Einhorn

H. William Batt

[Reviewed March, 2012. The book was published in 2006 by the University of Chicago Press]

Two themes of early American history one would never think to connect are American Taxation and American Slavery. These words form the title of a book by University of California, Berkeley, professor of history, Robin Einhorn. In a prodigious effort of scholarly documentation, she unites the history of these institutions inextricably as one would not have thought.

The first American revenues were for the most part either poll taxes or property taxes. In the northern colonies, property taxes took root early on and assured stronger governments than evolved in the south. Southern colonies were more dependent upon poll taxes, and governance by landed elites was slow to morph into political structures. Poll taxes were of course head taxes, whereas property taxes were for the most part land based. But what were slaves: property or persons? This became a pivotal question in the post-revolutionary period. Provisional reliance upon tariffs and land sales would ameliorate the pressure, but slavery would continue to divide the North and South as a fiscal as well as moral issue until the advent of the Civil War itself.

One can appreciate what dilemma slavery posed to tax policies: if slaves were property, then what was their worth and how should they be taxed? They needed to be valued according to their work productivity, which varied by their age, abilities, and other factors. If slaves were persons, there was a difficulty in comparing them to freemen, mostly whites. So it evolved that slaves would be three-fifths of a person for tax purposes even before it was true for weighing their political representation.

What constituted a "direct tax" was largely resolved by 1780; the emerging consensus was that only taxes on persons, slaves, land or property generally qualified as such. As it happened, however, the national government, without the means to tap either revenue stream in any adequate way, resorted to a tariff. This was intended initially as a wealth tax of sorts, but was quickly appreciated by the emerging northern states as a protection of their infant industries. So it came to fall disproportionately on the south and the growing western regions.

Professor Einhorn points out that the tax design that was adopted at the time of the American revolution, with little similarity to tax designs on the continent, set the framework for a revenue structure that endured until the end of the 19th century, and bears strong similarity to tax designs that exist to this day. Poll taxes continued in the United States until the mid-20th century, and are still employed elsewhere in the world (including the UK) quite commonly. Taxes on property continue to be modified in recognition of their impact on commerce and trade, even though a tax on the value of land alone provided an early model.

Even at the beginnings of American revenue designs there was some understanding of land value taxation, and this history account alludes to some of them in passing. Still, the author's limited understanding of land economics fails to help her appreciate how the taxation of land rents could have facilitated sounder revenue policies in early American history. One might hope that her experience in having now finished her second book in which property taxation plays a pivotal role will help her to appreciate the important national discourse on land value taxation, the so-called "single tax," as it unfolded after the Civil War and into the 20th century.