• The Berkeley economists write that a north-south divide affected attitudes around taxation.
• They point out exemptions and tax avoidance have created levels of inequality not seen since before the Great Depression.

In “The Triumph of Injustice: How the Rich Dodge Taxes and How to Make Them Pay,” economists Emmanuel Saez and Gabriel Zucman draw a connection between U.S. tax policy and the nation’s history of slavery.

In the pre-Civil War era, Northern states had much more highly developed taxation systems than did their Southern counterparts. Northern local governments would use taxation to raise funds for public projects, but communities in the South by and large made no attempt to raise revenues by taxing income.

The economists explain that slavery was a major driver of this dynamic. “A fear haunted slaveholders of the South: that non-slaveholding majorities would use taxation to undermine and eventually abolish,” they write. “They particularly feared wealth taxation: at a time when 40% of the population was considered property, property taxes were an existential threat for slaveholding planters.”

This culture of aversion to taxes is still with us today, Saez and Zucman point out, and has contributed to an intensifying of wealth inequality. They show that wealth inequality is at its most extreme levels since the 1920’s, before the Great Depression. They note, “for the first time in more than a century, billionaires now pay lower tax rates than their secretaries.”

The 2018 federal tax cuts, which disproportionately favored the extremely wealthy, are evidence this cultural attitude shows no sign of going away anytime soon.