Wealth and Property Taxation in the United States

We study the history and geography of wealth accumulation in the US, using newly collected historical property tax records since the early 1800s. The US 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 US since the early 1800s. The US experienced extraordinary wealth accumulation after the Civil war and until the Great Depression. Second, we reveal that spatial inequality in the US has been large and highly persistent since the mid-1800s, driven mainly by Southern states, whose
long-run divergence from the rest of the US 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. This system is morally abhorrent and implies wrongly counting 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.

AUTHORS

• Sacha Dra, World Bank, sdray@worldbank.org
• Camille Landais, London School of Economics and CEPR, c.landais@lse.ac.uk
• Stefanie Stantcheva, Harvard, NBER, and CEPR, sstantcheva@fas.harvard.edu

MEDIA CONTACT

• press@wid.world.com

ACKNOWLEDGEMENTS

We thank Simon Boutin, Marion Brouard, Enrico Calvanese,
Zihan Chen, Miguel Fajardo-Steinhauser, Eloi Flamant, Alice Lapeyre, Ricky Li, Thomas Mikaelsen, Jingyi Wang, Tanggang Yuan, and especially Daniele Goffi, Nicolas Grimprel, and Lukas Rodrian for excellent research assistance. We gratefully acknowledge financial support from STICERD, the Lincoln Institute of Land Policy, and the International Inequality Institute.
We thank participants in the OMG Transatlantic Talks workshop, the NBER  Development of the American Economy group, the NBER Public Economics group, seminar participants at Boston University, Harvard, the University of Maryland, Lille, and London School of Economics, Claudia Goldin, James Feigenbaum, Martin Fiszbein, Jim Hines, Larry Katz, Naomi Lamoreaux, Robert Margo, Chris Meissner, Thomas Piketty, Paul Rhode, Joel Slemrod, and JohnWallis for useful feedback and suggestions.