The Black Tax by Andrew Kahrl
On May 20, University of Virginia historian Andrew Kahrl will visit Milwaukee to discuss his important new book, The Black Tax: 150 Years of Theft, Exploitation, and Dispossession in America. In anticipation of this discussion, historian and Shepherd Express contributor Michael Carriere sat down with Andrew to find out more about the troubled history of tax policy in America.
M.C. What drew you to this topic of tax policy?
A.K.: I was investigating the causes of Black land loss across the 20th century and kept finding examples of Black families being forced to sell their land or losing it to tax foreclosure because they were unable to pay the property taxes. I then began finding examples of Black property owners being subject to intentional over-taxation at the hands of local white officials. I soon discovered that these were not isolated examples, but part of a pattern found in both rural southern counties and northern cities. And, of course, in all of these localities where Black people were being overtaxed, they were also being grossly underserved when it came to the public goods and services their tax dollars paid for. These findings could not have been more at odds with public perceptions of who paid taxes and who enjoyed the bulk of public goods and services in America. It became obvious that the history of taxation in America was shrouded in myths and misconceptions, and one of the reasons why was because no historian had considered African Americans’ actual experiences as taxpayers. So, that’s what I set out to do.
MC: And what does viewing American history through the lens of tax policy show us?
AK: Not to state the obvious, but taxes—like death—affect all of us and, by extension, affect every aspect of a society and its history. I believe you can learn a lot about a nation’s history by looking at how it has raised and spent the public’s money. And you can learn even more about how power operates in any given time and place by looking at how those laws and policies were administered and enforced. When you look at these dynamics at local level, as my book does, you begin to see structural forces and bureaucratic instruments of inequality that had been hiding in plain sight. Looking at the 20th century US through a fiscal lens allows us to not just describe, for instance, the growth and prosperity of suburbs and mounting struggles of cities in post-World War II America but show how it happened: the fiscal structures and tax incentives that were fueling those changes, the material advantages and disadvantages that resulted, and the political struggles that followed.
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MC: Your book highlights individuals like Allen Blair and companies like the Interstate Bond Company that were able to buy tax liens on properties in Chicago, which essentially allowed them to take ownership of homes that homeowners may have only missed one tax payment on. What allowed for such practices to flourish throughout the 20th century?
AK: In the majority of US states (but notably not Wisconsin), when a property owner fails to pay their taxes, the county will place a lien on their property and sell that lien for the amount of taxes owed to a private investor at a tax sale, who can then charge exorbitant interest (in some states, as high as 48%) and attach a host of fees onto the debt, which the homeowner has to pay to remove the lien. And if they cannot, the tax lien investor can claim title to their home. As I show in my book, this extremely punitive system of enforcing property tax payments and punishing delinquent taxpayers was also extremely lucrative for those who made a business of investing in tax liens. In postwar Chicago, institutional and individual tax lien investors like Interstate Bond Company and Allan Blair amassed fortunes from interest and tax foreclosures. Their primary victims were poor, financially distressed, and disproportionately Black homeowners.
MC: Here in Milwaukee, large out-of-state firms have bought “bundles” of foreclosed homes from the city over the past few years. Once a certain amount of money is extracted from these homes, they are often left to rot, as the firm has made what they consider an acceptable profit form these properties. Can we connect such a practice to the histories you uncover in The Black Tax?
AK: The strategies vary, but among real estate investors, the goal is always the same: maximizing the return on investment. And in poor and distressed housing markets, there are numerous ways to realize massive returns from minimal investments. Matt Desmond’s book on Milwaukee [Evicted: Poverty and Profit in the American City] made that plainly clear. Exploiting tax delinquency laws is one among many ways of doing so. Many of the tax liens sold in urban markets are bought as speculative investments. Like other investors who buy up cheap properties in bulk, tax buyers do nothing to maintain or fix up these homes and just wait for an opportunity to sell. They often don’t even pay subsequent taxes, either, and are content to let the properties fall back on the delinquent tax rolls.
MC: You call for “a federal fiscal-equity program” towards the end of the book. What ultimately stands in the way of the creation of such a mechanism?
AK: The US is a profoundly unequal society, and our tax policies and public spending practices contribute to and exacerbate those inequalities. We desperately—and massively--need to reinvest in public institutions, goods, and services, especially those at the local level, and rebuild our broken social safety net. America’s current fiscal structure, which forces localities to rely largely on their own revenue sources, works against those goals. It instead ensures that some places will have ample resources, and residents will enjoy relatively low taxes for superior public services, while others will struggle to keep their streets paved, libraries open, teachers paid, and drinking water safe. We should refuse to accept this situation and search for solutions. A fiscal equity program, like the ones found in every other advanced federated nation in the world, is one way of doing so. There are numerous obstacles standing in the way of a structural overhaul of our tax system, not the least of which are the significant advantages our current system affords to mobile capital and affluent, predominantly white Americans. But I think telling a more complete and accurate history of how our current system works, how it was built, and what it has done is the first step toward sparking a wider discussion over what to do about it. I hope this book does that.
Andrew Kahrl will be in conversation with Marquette University professor Robert Smith at the Dr. Martin Luther King Jr. Community Center, 1531 W. Vliet St., on May 20, 6:15 p.m.-7:45 p.m. District 10 Alderperson Sharlen Moore will provide opening remarks.
Get The Black Tax at Amazon here.
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