Property Tax Web Series

Abstract

We study the history and geography of wealth accumulation in the U.S., using newly collected historical property tax records since the early 1800s. The U.S. General Property Tax was a comprehensive tax on all types of property (real, personal, and financial), making it one of the first “wealth taxes.” Drawing on many historical records, we construct long-run, consistent, high-frequency wealth series at the county, state, and national levels. We first document the long-term evolution of household wealth in the U.S. since the early 1800s. The U.S. experienced extraordinary wealth accumulation after the Civil war and until the Great Depression. Second, we reveal that spatial inequality in the U.S. has been large and highly persistent since the mid-1800s, driven mainly by Southern states, whose long-run divergence from the rest of the U.S. predated the Civil War. Before the Civil war, enslaved people were assessed as personal property of the enslavers, representing almost one-half of total taxable property in Southern states. In addition to the moral and ethical issues involved, this system wrongly counted forced labor income as capital. The regional distribution of wealth and the effects of the Civil war appear very different if enslaved people are not included in the property measure. Third, we investigate the determinants of long-term wealth growth and capital accumulation. Among others, we find that counties with a higher share of enslaved property before the Civil War or higher levels of wealth inequality experienced lower subsequent long-run growth in property.

This paper was presented by Stefanie Stantcheva (Harvard University) on September 8, 2023 as part of the 2023-2024 Syracuse-Chicago Webinar Series on Property Tax Administration and Design. Caroline Weber (University of Kentucky) was the discussant for this presentation.