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We Can’t Blame the South Alone for Anti-Tax Austerity Politics

The legacy of slavery is often invoked to explain the stunted welfare state. But the strongest resistance to taxation and redistribution came from the Northern ruling class.

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.