Working Paper: NBER ID: w31080
Authors: Sacha Dray; Camille Landais; Stefanie Stantcheva
Abstract: 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. 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.
Keywords: Wealth; Property Taxation; Inequality; Historical Data; Enslavement
JEL Codes: E01; H20; H71; J15; N31; R12
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Historical property tax records (N93) | long-run consistent high-frequency wealth series (E21) |
| Geographical characteristics (R12) | long-term wealth growth (G51) |
| Literacy rates (J89) | long-term wealth growth (G51) |
| Presence of enslaved property (P14) | long-term wealth growth (G51) |
| Higher inequality (D31) | lower increases in literacy rates (I24) |
| Higher inequality (D31) | lower growth rates (O49) |
| Geographical characteristics (R12) | long-run growth (O49) |
| Wealth per capita in the South (D31) | stagnation at lower levels (P39) |
| Enslaved property (P14) | slower long-run growth in property (R33) |
| Wealth accumulation (E21) | spatial inequality (R12) |
| Civil War (H56) | rapid growth in national wealth (N12) |