Here’s an irony: The end of slavery also ended an Alabama tax structure that was in many ways more progressive than what replaced it.

   States that before the Civil War drew a large portion of their revenue from taxes on slaves (slaveowners paid a tax based on the work worthiness of each slave) no longer had that source of income. So general taxes were increased to make up for that lost revenue, triggering a citizen revolt which eventually led to a new constitution with barriers on taxation.

   “In the antebellum period, the primary source of state revenue was the tax on slaves,” said Dr. J. Mills Thornton, an expert on Southern tax policy of that period. The tax structure at that time was considered progressive because the wealthier paid a higher portion of taxes.

   Land taxes, meanwhile, were very low, leaving the yeoman, nonslave-owning farmer with very little tax liability. In fact, Thornton said, the average farmer in Alabama would have paid probably $5 a year in property taxes between 1820 and 1860.

   “The abolition of slavery imposed a twin threat to this order,” Thornton said in a telephone interview. “By abolishing slavery, you abolished a major tax source. Also, by abolishing slavery, you dramatically increased the number of citizens that needed costly state services in one fell swoop.

   “Instead of being a source of revenue, these freed black slaves now needed public schools and a whole range of public services. On top of that, they were poverty stricken and had no property to be taxed.”

   Thornton, an Alabama native and now a history professor at the University of Michigan, said this state’s experience was typical of many in the South at the time.

   During Reconstruction, poor whites who owned a piece of land were suddenly hit with high property taxes.

   “Their tax burden soared,” Thornton said. “For the typical poor white but landholding farmer, all of a sudden he was having to pay enormous new quantities of taxes, and all for the benefit of nonproperty-owning blacks.

   “It created a great deal of hostility, knowing he was paying all this and getting nothing more in return.” 

   Disputes over tax policy became a principal issue in political fights between Democrats and Republicans during Reconstruction. Many new officeholders won on promises of returning the tax burdens on poor whites closer to levels that were in place before the Civil War.

   Alabama’s 1875 constitution set limits on rates and percentages for assessed land values. But in the ensuing years, the education system continued to suffer financially because of low property taxes.

   The 1901 constitution actually “liberalized” the property tax structure. The tax bite was softened by channeling most of the revenues to “white” schools. Suffrage provisions such as poll taxes and literacy tests were put in the 1901 constitution to keep blacks and poor whites from retaliating at the polls.

   World War I rolled around and there came again a need for more revenue. Resistance to property tax hikes remained high. The federal income tax began in 1913, prompting Alabama to attempt a state income tax. The Alabama Supreme Court, however, shot that down, saying it violated the 1901 constitution.

   Property tax revenues plummeted with the Depression, wiping out a major source of money for schools. Many teachers were paid with IOUs. A state income tax was finally added, ratified by voters, with monies earmarked for teacher salaries. The state sales tax was begun in 1935.

   Former Gov. “Big Jim” Folsom made an aggressive attempt to reform the constitution shortly after taking office. On March 7, 1947, he called for a special session of the Legislature to set up a constitutional convention. Lawmakers soundly rejected that request. Subsequent attempts were also unsuccessful.

Return to: A State Buried in Paper, Introduction

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Reprinted with Permission from TheHuntsville Times.