When Confederates Wrote Tax Law

With the passage of a monumental package of tax changes on the horizon, the Republican Party has arguably taken another step in its Confederate transformation.

Republicans like Sen. Bob Corker of Tennessee, and probably even more Democrats, may be befuddled at how the GOP party went from excoriating President Obama for his 2009 stimulus package to trillion-dollar deficit spending in good economic times. Theories abound.

Here, we’re testing a specific explanation — that  in the age of Trump, the Republican party reflects the politics of the former Confederacy.

To explore the current tax issue in full, I would need to do much more research on the GOP, exploring areas such as the impact of President Nixon’s “Southern Strategy.” But for this piece we’ll focus on a specific moment in time — Presidential Reconstruction. We’ll look at how former Confederates structured their taxes immediately after the Civil War.

First, we meet President Andrew Johnson. Born dirt poor in North Carolina, he worked his way up through the ranks of Tennessee state politics railing against the landed gentry of the South. He was vice president under Lincoln, and in the aftermath of Lincoln’s death, radical (meaning liberal) Republicans thought he might be more progressive than his predecessor.

“Treason must be made odious, and traitors must be punished and impoverished,” Johnson said.

Johnson had the support of a Republican-controlled Congress, and as the commander in chief, military control over the defeated South. He had every intention of making the slave-owning planter class pay for the war, and bringing his fellow “yeoman” to power across Dixie.

These people often owned a little land, no slaves, and attempted to grow what food they needed and barter for what they couldn’t produce themselves. They didn’t have employees, they didn’t have employers, and they didn’t earn wages. Large-scale factories, mines and other industrial employers were scarce across the Confederacy, while slavery provided employees with no rights at all.

Johnson, life-long champion of poor whites, ignored Fredrick Douglas’ suggestion to form a multiracial coalition of poor people. In a classic example of social identity at work, Johnson distrusted feed slaves more than he hated planters. Like many poor whites across the South, he suspected African Americans would remain loyal to their former masters and keep the yeoman out of power.

“The colored man and his master combined kept [the poor white] in slavery by depriving him of a fair participation in the productions of the rich land of the country,” he said.

President Andrew Johnson was ultimately impeached by an infuriated Republican Congress, but acquitted by a single vote in the Senate.

Johnson’s deep-rooted racism kept him from giving blacks the vote, and ultimately kept him from forming a workable majority party. There’s plenty to be said about all of this, but let’s skip to who came to power under his oversight.

In 1865, elections across the South favored former Whigs, white men who could claim to have opposed secession but who sided with the Confederates once hostilities commenced. They were not necessarily unionists who fought the Confederacy from within, and they certainly did not favor civil rights for blacks. For example, up country yeoman had a longstanding issue with counting African Americans when apportioning legislative districts, because plantations dominated the weight of the population in many areas. By counting blacks for apportionment, but denying them the right to vote, planters won a disproportionate share of legislative seats.

In any event, Johnson courted men who today we would call part of the establishment. Most had either worn the Confederate uniform or shared the Confederate’s social views.

“The stark truth was that outside the Unionist mountains, Johnson’s policies had failed to create a new political leadership to replace the prewar ‘slaveocracy’ — partly because the President himself had so quickly aligned with portions of the old elite. If the architects of secession had been repudiated, the South’s affairs would still be directed by men who, while Unionist in 1860, formed part of the antebellum political establishment,” wrote historian Eric Foner.

The Southern states set about rewriting their constitutions at this time, facing economic devastation wrought by war and the collapse of the planters’ command of slave labor. Supporters of the “New South” movement wanted to draw northern business investment, modernize labor relations (bring in immigrants, go to the wage system) and build infrastructure like railroads. But the laws passed had another goal in mind. Consider the tax systems that emerged:

  • Heavy poll taxes on freedmen, requiring them to pay a flat rate in cash “per head.”
  • Low taxes on property, the largest owners of which were planters
  • High taxes on professional income, such as that made by craftsmen and urban commercial interests

These tax laws were part of a sweeping effort to maintain the control planters had over their former slaves, ensuring they were less employees than indentured servants. In Mississippi, for example, this sort of tax scheme created one county in which the largest landowners paid less than $200, while a butcher paid more than that amount, and a shoemaker $75. Adding together state, county and local poll taxes, former slaves might pay $15 per person. Some states taxed dogs and guns, making it difficult for freedmen to feed themselves through hunting.

In fact, many blacks wanted nothing more than to become like the yeoman, self-sufficient farmers. Freedmen wanted out of the white man’s economy, and those writing the laws wanted the freedmen to be literally chained to it.

Taxation was just one part of an intricate net of laws that attempted to maintain the labor relations of the plantation period. If blacks didn’t have cash to pay their poll taxes, the state could force them to work to pay them off. So called anti-vagrancy laws made it a crime to be idle or misspend what one earned, allowing the state to force blacks back into plantation labor. If former slaves were deemed by the courts too poor to care for their children, their children could be “apprenticed” to white employers (usually former owners), who held them under contract.

Meanwhile, New South economic reforms failed spectacularly. In 1866 in 1877 despite much talk of “railroad fever,” only 422 miles of track were laid across the entire former Confederacy. Attempts to recruit immigrants to take the place of slaves were laughable. As Foner recalls, one planter lured in a group of Swedes to take the place of his slaves, offering them the blacks’ former quarters and food rations, and was dismayed to see the immigrants promptly pack up and leave.

To be fair, recovering from generations of slavery and a horrific war is a monumental task. But President Johnson’s failed attempt at reconstruction showed that the old school of southern thought simply could not surmount its own prejudices and limitations. Here’s Foner again:

“The inability of the leaders of the government [Johnson] created to conceive of blacks as anything but plantation labor doomed the idea of real economic reform. In the end their policies and vision were less a new South than an improved version of the old.”

With all this in mind, let us return to the “once in a generation” Republican tax bill, as Sen. Mitch McConnell of Kentucky called it. An early Washington Post analysis of the bill as it passed the Senate helpfully listed winners and losers. Among the winners:

  • Big corporations
  • Stock owners
  • The children of the wealthy
  • Some of the middle class (this part is the most debated section)

Among the losers:

  • College students (and Ivy League schools in particular)
  • 13 million people who will lose their healthcare
  • The elderly
  • The poor

These set of interests tell us something. (A similar and more recent list from the AP is here.) We know at least that the modern Republican Party remains loyal to industrialists, a bond that dates all the way back to the Civil War.

What does it tell us about Confederate identity?  First, we could say that like Presidential Reconstruction, this tax package is intent on keeping the existing power structure in place. Simply take out the planters and add in the CEOs, and you get the idea. Changes to the estate tax, taxes on stocks, and student loan interest that favor the rich all disproportionately benefit whites as opposed to blacks.

Charges of favoring the wealthy have long been leveled against the GOP.  But  glance up at that “losers” list. College students. For the first time ever, this bill would create a tax break for who are saving money to pay for private schools, in addition to those saving for college. Meanwhile, it would actually raise taxes for graduate students, prompting objections from regional research universities.

More importantly, however, is the type of person who will benefit under the GOP tax plan. Much of the debate of the tax bill’s impact on the middle class is muddled because it actually focuses less on the amount of money someone makes, and more on how that money is made. This is a significant departure from the tax policies of either party. Here’s how a New York Times article put it:

“So a decorator, an artist or a plumber would have a higher tax rate than an owner of a decorating business, an art shop or a plumbing-supply store. A corporate accountant could have a higher rate than a partner in an accounting firm. And under the House bill, which differentiates between active and passive investors, the head of a family business who works 60-hour weeks would have a higher rate than her brother, who doesn’t work there and can spend his days sleeping on the couch.”

Thus, both the Presidential Reconstruction South and the modern Republican Party formed an alliance of white people across economic classes, but went on to create a tax system that benefited a particular class of white business people. The southerners couldn’t bring themselves to court the black vote, and therefore fell back to a pro-planter tax system. The Republicans, unable to court Democratic votes, have coalesced around a single point of agreement — that an owner should pay less than an employee.

Thus, both the Presidential Reconstruction South and the modern Republican Party formed an alliance of white people across economic classes, but went on to create a tax system that benefited a particular class of white business people.

Republicans are justifying their work in terms of economic development — that lower taxes lead to economic growth that increases tax revenue. But, as one NPR report noted, no nonpartisan analysis of the bill agreed the bill would pay for itself.  Instead, it will increase the national deficit by $1 trillion.

Instead, this bill wears the clothes of old Republican ideas over Confederate bones. It talks the talk of economic development, of a New South. But in actively obstructing Americans aspiring to the middle class via education, and burdening employees of any income to advantage employers of any income, it walks the walk of planter protectionism.  

We may see more supporting evidence in the final bill. An important factor would be the degree to which it affects different races differently. Another facet will be whether Republicans of today like the presidential reconstructionists of old, would rather cut social programs for minorities or the poor than find ways to pay for them (there is some evidence of that already). It seems possible this new GOP is a hybrid of the Wall Street interests of the legacy Republican Party, combined with the class-based elitism of the Confederacy.

To help us understand this more, we’ll pick up with the next phase of Reconstruction in Part 2, a time when freed blacks and Republican whites united to rewrite the political order of the South.

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