State power everywhere rests on the ability to extract resources. Governments collect contributions from citizens or subjects, in kind or in money. They impress soldiers, levy taxes, raffle off lottery tickets, collect duties on imports, charge tolls on freeways, fine residents for petty crimes, and seize property if those residents fail to pay. When needs are urgent and too big to demand of constituencies all at once, sovereigns mint coins, print currency, or buy up banks’ assets to expand the money supply, betting that rising demand will sustain its value. Or they borrow, betting that future tax receipts will suffice to repay their creditors. After filling the public purse, governments can do things with money—with our money—that we cannot do. Scale and sovereignty enable states to mount collective projects that are impractical if not outright impossible for private actors to undertake: military protection, infrastructure, and social welfare, to offer the three broadest examples.

Fully fledged fiscal states—financed by robust and regular taxation, capable of large-scale public borrowing, and stabilized by central banking— arose in response to world-historical events, most prominently inter-imperial wars, revolutions, and financial crises. Yet the fiscal state also operates on the micro scale, and intrudes into the most intimate parts of our lives (ask any wonk trying to boost fertility rates with a child tax credit). Across history, demands for taxes paid in money forced households to produce a surplus for market sale above subsistence levels, transforming gendered divisions of labor and the proportion of crops grown for cash versus consumption. Running the same logic in reverse, modern policies like the federal home mortgage interest deduction lowered the cost of subsistence within the mortgaged home, enabling (disproportionately white) homeowners to build more wealth than tenant peers by layering a tax discount on the equity-building of mortgaged ownership. Whether by taking from us or by gracing us with exemptions, the fiscal state nudges us toward work or leisure, consumption or investment. Tax implications color our choices to marry, divorce, take up a job, quit, move, or bear children. For the more fortunate among us, they even dictate the plans we make for our decease. L’état, c’est nous.

If one zooms out further, moving from the scale of individual tax returns to the brackets as a whole, we can see how public finance not only penetrates households but also arrays them in relation to one another. The fiscal state rivals the workplace as a field in which classes form and tensions between them sharpen. It plays a powerful role in the reproduction and augmentation of class rule and in the articulation of divisions within classes, even if its administrators are occasionally brought to heel by creditors or forced to capitulate to taxpayer revolts. It nests the household within these class relationships while mediating between the domestic economy and the global arena of international lending, trade policy, and foreign exchange.

Within this multiscalar universe, the United States is an outlier. Among the richest nations, it taxes less than any other country, save the proud corporate tax haven of Ireland, and it stands dead last in terms of public spending to alleviate poverty.Footnote ¹ The United States’ debt—over $36 trillion at the time of writing—far exceeds that of any other country, and is twice the size of China’s, which ranks second. It can afford to borrow so liberally because, at least for now, the dollar serves as the world’s reserve currency.Footnote ² Readers of this journal will need no reminding that this exceptional fiscal state produces staggering wealth inequality, that the chasm between the richest and poorest continues to widen, and that both measures seem destined to worsen in the years to come.

When searching for the origins of the United States’ aristocratic fiscal politics it might be tempting to alight on the retrenchment of the welfare state that began in the 1980s and accelerated during the Clinton years. But that would miss how the contemporary fiscal state bears the imprint of much older histories of colonialism, slavery, agrarian revolt, financial crisis, and war. Fortunately, new fiscal histories of the United States are in a state of efflorescence. Revisionist work infused with economic heterodoxy and social histories of capitalism have rescued fiscal topics from staid institutionalists, producing work that should enrich the study of inequalities of all stripes. By assembling a collection of recent works on money, public debt, and taxation—subjects treated in isolation within the literature, but which form a totality in practice—this review attempts a composite portrait of the United States’ fiscal state formation in the long run. Present in the foreground and at each stage is real estate: the iconic plot of farmland or single-family home.

What the books under review collectively demonstrate is that the United States’ fiscal state has consistently promoted the ownership of real estate as an asset that generates wealth, whether as collateral for cheap credit or as an appreciating investment in its own right. It has done so by availing of governing techniques that the sociologist Sarah Quinn calls “fiscally lightweight.” Public provisions for land and housing were hidden, indirect, and designed to avoid political obstacles and heavy, up-front, overt taxation. Taxpayers were spared, or at least largely unbothered, so long as the system did not fail—which it has and presumably will again. This portrait of a lightweight fiscal state is striking, but not at all unfamiliar to historians of the United States. Political historians have described a “pragmatic” state that wielded a “peripheral power,” “out of sight,” that worked in partnership with civil and private institutions to form an “associational state” (or more colorfully, a “Rube Goldberg state”) which kept its welfare provisions “hidden” in comparison to its rich nation peers.Footnote ³ And yet, as a clutch of new books show, this ethereal fiscal state was secretly heavy-handed, extracting in the shadows and spending furiously to promote, for some, wealth accumulation through the primary asset of the home.

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A fiscal pattern of lightweightness began before the United States, when colonies faced a challenge inherent to settler formations. Colonists needed to build an economy more or less from scratch, without any capital, save land—which belonged, inconveniently, to other people. Expensive bursts of war would be required to take durable possession of Native territories. To do so, settlers constructed a fiscal regime that necessarily tilted toward the future, creating wealth by anticipating the fruits of conquest. In British North America, this anticipatory fiscal state rested on issuing paper currency, or “bills of credit,” the subject of Katie A. Moore’s Promise to Pay: The Politics of Money in Early America.

Bills of credit were receipts issued by colonial assemblies for goods or labor that colonists contributed—for example, grain, clothing, or military service. While the goods and labor traded for bills of credit flowed to campaigns against the French, Dutch, Wabanaki, Tuscarora, and Yamasee, Moore details how the bills themselves took on a life of their own within the colony, supplanting book credit at the country store, serving as wages to hire labor, and, since they counted as legal tender, offering a means of repaying debts. Wars, the main occasions in which colonies needed to summon considerable resources in a rush, birthed a fiscal state so light that it made itself felt first by paying its constituents.

Bills of credit served a military-fiscal state built on the seizure of economic resources from outsiders. Many wars launched by early settlers were mere pretexts for capturing Indigenous people, mainly women and children, who formed the first cohort of plantation labor before surging imports of Africans in the eighteenth century changed the face of slavery in the thirteen colonies.Footnote ⁴ No colony had more voracious an appetite for Indigenous slaves than South Carolina, which issued bills of credit to fund raids for Apalachee, Tuscarora, and Yamasee slaves. South Carolina’s disastrous 1715 campaign against the Yamasees tested the limits of this model. Yamasees came close to destroying the colony, forcing Carolinians to huddle in a barricaded Charlestown. Bills of credit plummeted in value, though not, as Moore explains, because the South Carolina assembly kept printing bills of credit, as other historians have assumed. What buoyed or tanked the value of bills of credit was not how many of them there were—sometimes their value appreciated as their quantity grew—but whether or not they would be accepted as payment. For this reason, assemblies enacted taxes at the same time as they authorized bills of credit, posting a deadline for collection years ahead. During the Yamasee War, South Carolina’s bills of credit plummeted in value because colonists weren’t sure that the entity to which they were expected to pay taxes would continue to exist.

Early settlers went on to develop more sophisticated fiscal mechanisms, including loan offices that issued bills of credit collateralized by land. But currency financing remained a practical form of victory-anticipating war mobilization, one that the colonies put to productive use in the late eighteenth century to gain independence from Britain. $200 million in paper notes called Continentals were issued to fund the war effort. But the insurgent United States faced another variant of the sovereignty problem that South Carolina had encountered in its war against the Yamasees. In addition to Continentals, which were actually IOUs that could be redeemed for specie at a specified date, the revolutionary Second Congress had borrowed tens of millions of dollars more in the form of war bonds and loans from French, Dutch, and Spanish creditors. Under the Articles of Confederation, the founding document that bound new states in a loose alliance, Congress lacked any coercive powers to collect the taxes needed to service its massive debt. Worse, it could not prevent states from issuing currency. States had taken on enormous war debts of their own, and to retire them imposed onerous taxes on their citizens. Eventually, tax revolts, like Shay’s Rebellion in 1786, prompted states to print money to ease burdens on indebted taxpayers—a lightweightness forced from below. Yet the inflation that resulted shortchanged the national government’s creditors, and thus weakened the government’s stature as a creditworthy borrower at the very moment in which, as an infant state, it desperately needed international recognition. When it was ratified the following year, the U.S. Constitution therefore revoked from states a well-worn perquisite. “No State,” reads a clause in its very first article, will “emit Bills of Credit.”Footnote ⁵ Indebtedness and subordination to the creditor class disciplined the federal government and set limits on fiscal lightness.

The U.S. Constitution was perhaps the most important document used to keep the federal fiscal state out of sight. Delegates to Philadelphia brought with them distinct cultures of taxation carried over from the colonial period, detailed by Robin Einhorn in her classic study of the United States’ federated tax system. Colonies with slavery had stunted mechanisms for assessing taxes to preserve planter class rule. Slaveholders kept a chokehold on assemblies and appointed sympathetic assessors to prevent taxes from breaking up large landholdings or making slaves too expensive to own. Northern tax officials were elected, by contrast, and their tax systems were more democratic, if not always progressive. At the constitutional convention, rather than hash out a robust system of direct taxes on property, which would have required hammering out which kinds of property would be subject to taxation, and thus confronting slavery, delegates decided to avoid the subject altogether. No federal direct taxes were included in the Constitution (unless apportioned by population, a condition that made them essentially unworkable). Instead, Einhorn explains, taxes would be hidden, collected at ports in the form of an impost—a duty on imports—which would reap specie from merchants and remit it overseas to the governments’ creditors. As Gautham Rao and Hannah Farber have shown, the state’s reliance on customs revenue made it particularly deferential to merchants and marine insurers, who exercised a powerful influence on trade policies and diplomacy.Footnote ⁶

In the coming decades, the impost would mature into a protective tariff, levying higher duties on British finished goods to nurture U.S. manufacturers. Even though tariffs, as flat taxes on consumers, were patently regressive, they were not thought of as such until the late nineteenth century, in part because they were usually quite modest. Before then, workers cared whether their own trade was protected, and cotton planters protested tariffs that nurtured domestic manufactures while threatening commodity exports. But apart from the occasionally explosive debates over who or what should be protected by the tariff, most could ignore that they were being taxed by the national government at all.

Illusions of taxlessness were also maintained by making a fiscal resource of “public” land, much of which still belonged to Indigenous peoples. Allan Greer and K. Sue Park have detailed how British colonies’ need to create money from land promoted a survey and deed registry system far more widespread than what existed in Europe at the time.Footnote ⁷ Clean title, articulated through a semi-rationalized property system, laid the ground for a distinctly New England invention: the mortgage, which could only work if a creditor was promised a clearly bounded and uncontested tract as collateral. After a chaotic few decades of speculation and haphazard land sales, the newly founded federal government consolidated a centralized property regime intent on making Native land a fiscal resource to repay its considerable war debts. Casting broad claims over Indian Country in the Northwest Ordinance and in territorial acquisitions like the Louisiana Purchase, the federal government seized Native land through a combination of military force and unequal treaties, carved it up by surveys, and sold it off to aspirant freeholders—or, as often, to land speculators. In an attempt to ensure broad distribution, the government kept minimum prices for public lands low ($1.25 per acre after 1819). Apart from a few years in the 1830s, receipts from land offices barely covered the costs of surveying and selling the land. Rather than raising money from land, the government used land as money, offering it to veterans as compensation for their service and donating it to states for them to sell and finance schools.Footnote ⁸ In American Bonds: How Credit Markets Shaped a Nation, Sarah Quinn traces New Deal federal housing programs to this system of taking Native land—by force, if necessary—and distributing it as a cheap or gifted public good. Making a nation of landowners, Quinn notes, “blurred welfare with warfare.”Footnote ⁹

Like the colonies that came before them, newer states on the bleeding edge of westward settlement needed to anticipate the wealth they had yet to build up on Native land. States lacked infrastructure, which requires large, front-loaded expenditures and often only generates revenue once complete. Federal prerogative narrowed states’ options for infrastructural financing. To ease burdens on settlers, federal law prohibited states from taxing newly purchased public lands for the first five years. To protect creditors from inflation, the Constitution had stripped states of their customary mode of currency finance. That left states with the quintessential mode of anticipatory state financing: public debt. Starting in the 1820s state governments issued millions of dollars in bonds to finance transportation infrastructure and banks, believing that their investments would sufficiently uplift property values and spread future tax burdens across a wide, prosperous base.Footnote ¹⁰ States borrowed most, and built the bulk of public works in this period. But perhaps the most spectacular use of debt to produce a mirage of taxless finance came at the federal level, during the Civil War, when Congress issued millions of dollars in federal bonds to finance privately constructed transcontinental railroads – secured, of course, by millions of acres of land grants—again, much of which was still firmly in Native hands.Footnote ¹¹ All kinds of states and nations issued public debt to pay for the big-ticket items of war and infrastructure. Only settler formations like the United States could use a violently constructed abundance of land as collateral to achieve a lightweight fiscal state.

Midway through the Civil War, the government abandoned any pretense of generating revenue from public lands and started offering homesteads for free to any settler households willing to work them. (Not to belabor the point, but many homesteads were on unceded Native land, especially on Lakota and Dakota territories).Footnote ¹² The Homestead Acts announced a new era of direct subsidy to agriculture, ostensibly to the benefit of yeomen farmers. Yet as Quinn points out, the government did not pair its broad distribution of land with a broad distribution of credit. Westering settlers experienced on a human scale the same need to anticipate future resources that had plagued colonial fiscal states. Without a homestead loan act to cover the upfront costs of establishing farms, households relied on the private mortgage market. Farm mortgages were typically short-term, with the principal due in a lump sum upon maturity. Most families refinanced rather than repay, making borrowers exquisitely sensitive to the movements of interest rates and the price of money. Mortgage rates were often twice as high in the agrarian South and West, and the scarcity of money in these regions made real interest rates even higher. If money’s value sank or interest rates rose, foreclosures rippled across rural land.

Opposition to deflationary monetary policies—namely the 1869 Supreme Court decision to repay war bond creditors in gold, and the Treasury’s 1873 demonetization of silver—inspired the late-nineteenth century Populist movement, which would in turn inspire federal credit programs designed to bolster land ownership. Although Populists lost their battle to expand the money supply by means of silver, they achieved a partial victory in the 1916 Farm Loan Act, which created a system of tightly regulated land banks that would issue mortgages capped at 6 percent. As Quinn explains, the law tried to please both bankers and farmers by creating private land banks and public land banks, papering over the very class conflict that the program was supposed to address. In the 1930s, New Deal credit programs would go further in catering to both sides of the credit relationship, offering some direct loans to tenant farmers but primarily routing federal credit through institutions that partnered with private lenders, or were at least carefully designed not to outcompete them. Such circuitous public–private credit programs carried lighter upfront costs and were politically palatable. Programs that smacked of government handouts would have clashed with farmers’ identities as independent producers. Worse, programs that nationalized mortgage provision would have stoked fears of a planned economy.

Quinn’s point is that credit programs built a sneaky developmental state that made land and homeownership surprisingly broad. Real estate became foundational to the United States’ remade twentieth-century fiscal state, and stunning agricultural productivity fueled remarkable economic growth. But monetary strain only worsened as commodities poured out of the heartland. As sociologist Monica Prasad has shown, policymakers interpreted the problem as one of under-consumption. Too much corn for too few corn-eaters kept prices low and money scarce, and tariffs only dampened demand further. Thus, while European countries hiked up their tariffs to stymie imports of cheap American produce, the United States ran in the opposite direction, reversing its century-and-a-half reliance on consumption taxes (tariffs and excises on tobacco and alcohol) in favor of a progressive income tax that allowed wage earners in the lowest brackets to buy more. FHA- and VA-insured mortgages anchored that consumption: they made the home a sound economic proposition, freed up income for retail purchases, and most importantly, served as an asset that could be leveraged for more debt, more buying, more growth.Footnote ¹³ Looking back from the New Deal, then, something startling comes into view: a long tradition of state-engineered prosperity through real estate ownership that can be traced, even if crookedly, to the founding problem of building settler wealth on Native land.

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But how lightweight was a fiscal state rigged to promote real estate? It depended who you asked. Andrew Kahrl’s The Black Tax: 150 Years of Theft, Exploitation, and Dispossession in America provides an unrelenting catalog of the heavy fiscal burdens Black proprietors shouldered while white benefactors of government credit prospered. As Quinn makes explicit, federal credit programs repeatedly entrenched racialized inequality by marking Black people as too risky to deserve mortgaged loans. But by descending to the state and local levels, Kahrl documents racist fiscal policies arguably more damaging than mere exclusion from government-engineered credit markets.

Kahrl’s story begins with Reconstruction, a moment immediately after the Civil War when it seemed possible that the federal government’s lavish promotion of landownership would be extended to freed slaves. Radical proposals to distribute land as material reparations for slavery were quickly shut down, but Black southerners nonetheless achieved a surprising degree of landownership. In 1900, a quarter of Black farmers in the Jim Crow South owned the land they tilled. By then, a movement was well underway to reverse these gains. Redeemers, a white supremacist movement determined to unmake Reconstruction-era federal protections of Black southerners, set out to strip Black people of land by mobilizing the very instrument planters had kept from the federal government’s hands: the property tax.

Three forms of racialized fiscal injustice took hold. In an inversion of the more familiar property undervaluations banks used to deny Black people mortgages (or to charge higher interest rates), white supremacist state and local governments routinely overvalued Black-owned properties for the purposes of tax assessments. Black families paid higher taxes even as they were pushed onto marginal lands. When they could no longer keep up with inflated tax bills, Black farmers lost millions of acres to tax forfeiture. Most of this land was snapped up by the largest white landowners across the South, reinforcing a racialized class divide that would trap landless Black people in sharecropping contracts and debt peonage. As slaves, Black people had lived as taxable property. Once free, Black people paid taxes that seemed to make citizenship itself a form of predatory inclusion, to borrow Keeanga-Yamahtta Taylor’s term.Footnote ¹⁴ Disproportionately extracted Black tax revenues were then disproportionately spent on white infrastructure, effectively financing the built environment of public segregation. Black people’s money flowed to the very schools that barred their attendance. In 1910, in Mississippi alone, there was a net transfer of more than $1 million from Black taxpayers to white-only schools.

What Kahrl shows is that this Black tax trifecta—over-assessment, revenue transfer, dispossession—formed a pattern that adapted easily to residential properties in new jurisdictions. When Black people migrated north in search of work and to escape Jim Crow, racist taxes followed. Tax systems in northern cities reinforced the segregated character of an American landscape massively redrawn by the New Deal credit programs Quinn discusses and the midcentury boom in homeownership they fed. Mortgages extended according to the racist standards of the federal Home Owners’ Loan Corporation (HOLC) consolidated segregated city neighborhoods and all-white suburbs. Federal mortgage-interest deductions complemented the lower state and local tax assessments that white homeowners enjoyed, compounding wealth accumulation. Black homeowners, Kahrl shows, paid more, and fell behind more often. Predatory “tax buyers” circled, ready to move in when counties placed a lien on delinquent properties. Tax buyers purchased liens by paying the taxes owed to the county. From that point forward delinquent taxpayers owed the purchaser of the lien, who assumed the process of collecting from homeowners while charging exorbitant interest rates. Tax lien investors could choose to collect this interest assertively or to make only the faintest attempts, wait for the homeowner to fall further behind on their taxes, and buy up the property at a bargain price when the county subjected it to forfeiture. Many owners had no idea that a lien had been placed on their property, let alone that it had fallen into the hands of a tax buyer, until they were notified they no longer owned their own home—sometimes by the same tax buyer who demanded rent or offered to sell the home back to them at an eye-watering price.

Racist taxation concretely shaped cities’ built environment, and dovetailed with a racial politics of municipal debt. Destin Jenkins’ Bonds of Inequality: Debt and the Making of An American City recounts how San Francisco borrowed its way into becoming a capitalist metropole of markedly uneven opportunity. In the early twentieth century, low interest rates and federal tax exemptions for gains from municipal bonds made it cheap for cities to pursue development through debt. Like states on settler frontiers in the nineteenth century, San Francisco built its infrastructure with white property ownership as the ideal, and did so by borrowing in anticipation of future tax receipts. As the city grew, white-dominated electorates and city governments pursued what Jenkins calls an “infrastructural investment in whiteness”—an urban development strategy that assigned borrowed funds to the construction and maintenance of public works that lifted property values in white neighborhoods.

Federally underwritten, municipal debt-financed “urban renewal,” or the razing of Black neighborhoods to make way for major infrastructure and housing construction, aggravated a downward spiral in the lived environment of working class and poor city dwellers. Jenkins offers a story of two playgrounds, crumbling and emptied for Black children, gleaming and cloistered for white, with creditors the architects of both. The image is striking, but as Kahrl’s longer history shows, municipal indebtedness was not necessary for such stark spatial expressions of racial inequality to emerge. Creditors leached funds and staked claims on future revenue, they exerted pressure and punished cities for having riot-raising (and therefore risk-entailing) Black populations, but the decisions to use municipal funds for white people alone were made by the voters themselves. Put otherwise, there is nothing inherently racist about public debt—or taxation. What mattered was the politics: so long as white taxpayers were in charge, and could suppress the numerous grassroots campaigns Black people mounted to buck off exploitative taxation and protest their exclusion from municipal spending, there would be two cities, a white one parasitic on the Black.

Kahrl and Jenkins’ histories culminate in the urban fiscal crises of the 1970s, which exploded first in New York City and then spread to distressed cities nationwide. Many factors conspired to bring down urban centers. Most fundamental were rising interest rates. Johnson’s refusal to abandon the Great Society’s fiscal lightweightness by raising taxes had allowed inflation to creep up steadily in the late 1960s. Then the oil shock of 1973 sent it soaring. Rising interest rates, hiked up in the effort to dampen inflation, made long-term fixed-income securities like municipal bonds unappealing. Investors pulled out of the market, driving up the cost of municipal borrowing. Jenkins explains how these shifts in financial markets compelled cities to issue shorter-term debt (which investors prefer when interest rates are rising, to avoid missing out on higher yields later). White electorates were also starting to vote down bond issuances that required raising taxes to cover higher interest payments. To thread the needle, city governments began hiding their borrowing, doing so by proxy. San Francisco underwrote bonds issued by non-profits that built parking garages, airport improvements, and stadiums on their behalf. Non-profit debt maintained a veneer of fiscal lightness, but since it carried cities’ guarantees, taxpayers were now on the hook for debt they had never approved by vote. As credit markets tightened and the Nixon administration retrenched Great Society-era subsidies, cities prostrated themselves before an increasingly apathetic creditor class. A race to the bottom began: which cities would sacrifice most, in terms of interest payments and in dignity, to sell bonds and remain solvent? Worse, if those cities failed—as New York City did, spectacularly, in 1975—who would pay?

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Kahrl and Jenkins depict vividly the nightmare of local fiscal control. Cities and states, which were also squeezed by rising interest rates in this period, were not only forced to sacrifice in a losing competition for dwindling credit. They were also given far too much freedom: they levied taxes with wanton racism, unfettered by regulation, and transferred masses of Black wealth to a coddled white homeowning class. Put otherwise, the problem was federalism, or at least a federalist tax system that owed its fragmented form to the Constitution, which had avoided treading on slaveholders’ interests, abdicated a centralized tax state, and left property taxes to states and municipalities. Kahrl rails against the absence in the United States of tax equalization laws that exist in other federated countries like Germany and Canada. Through such laws national or state governments can keep lower jurisdictions in check by ensuring that property taxes are evened out across districts. Undoubtedly, tax equalization would be a better plan than what we have going. Yet reading these books today, doubts creep in. As federal agencies are gutted in preparation for another round of eviscerating tax cuts, which will certainly plunge millions into poverty and achieve little more than sending one apartheid-loving military contractor to Mars, it’s hard to imagine the federal government of recent decades as a fair arbiter of local and state taxation.

As Melinda Cooper shows in Counterrevolution: Extravagance and Austerity in Public Finance, New York City’s near-bankruptcy was more than an urban crisis. It was a golden opportunity for a wider anti-tax political movement ascendant in Congress and already established within the Treasury. Cooper follows a cadre of economists and policymakers who advocated for “supply-side fiscalism.” These men had roots in Virginia School neoliberalism, which called for a gloves-off political approach (think: causing government shutdowns to refuse debt ceiling raises) and pushed radical cuts to public programs to balance budgets. Supply-siders agreed on austerity but found the Virginia School’s prudishness toward borrowing counter to the far worthier aim of promoting economic growth. More precisely, promoting economic growth through asset appreciation, rather than the productivity increases of Keynesian wisdom. What supply-siders wanted, then—and what they achieved—was to blow holes in the budget, to carve out gaping exemptions for capital gains on real estate and financial assets and thereby turbocharge returns on these categories of investment.

Supply-side fiscalism took a tradition of seeming lightweightness to an extreme. Tax cuts, marketed by their purveyors as fiscally conservative fat-trimming, are in fact government “expenditures.” Taxes uncollected are, in accounting terms, equivalent to public money spent.Footnote ¹⁵ To lift asset prices supply-siders went on a public spending spree, carving out targeted exemptions for owners of financial and real property. They deferred the problem of shortfalls indefinitely by borrowing, leaving Democrats with massive deficits to clean up anytime they took Congress. Immediate fiscal burdens were shunted down to households in lower income brackets.

Supply-siders’ first workshop was crisis-era New York City, which at that time possessed the perfect mix of raw materials: generous social spending, staggering debt, and an impressive real estate portfolio ripe for juicing. In 1975, New York’s outstanding debt neared $15 billion, and bankers balked, leaving the city unable to borrow further to service existing debts. At first, city officials responded with traditional fiscal conservatism, raising taxes modestly and slashing spending. The city’s history of high union density, labor militancy, and strong social movements had built an urban welfare state from below. It was placed wholesale on the chopping block, with hundreds of thousands of city workers eliminated, and hospitals, fire stations, and libraries closed. But this wasn’t enough. Two years into the crisis, with the prospect of attracting creditors still dim, advisors cracked open the supply-side playbook. Under Mayor Ed Koch, the city created hefty tax exemptions, rewarding landlords for improvements and developers for building on vacant lots. As Cooper explains, the idea was that decreased tax rates would be offset by increases in per-unit appreciation, and thus per-unit tax bills. Real estate values did in fact rise, but garish tycoons, including a young Donald Trump, found ways to offset any tax increases by encasing assets in trusts, impenetrable corporate forms, and the most impregnable tax haven of all, the family. Real estate has proven especially amenable to a resurgent patrimonial capitalism in which firms are held privately, within families, and kept intact across generations, untouched by estate taxes.

While Trump and his gang got rich, everyday New Yorkers were subjected to newly regressive forms of taxation: higher fares for public transit, higher fees for services, and most punitively, higher fines for petty misdemeanors. New York’s saga foreshadowed urban crises to come and became a model for heavy-handed taxes on a racialized working class. Kahrl includes municipal fee-farming, which gained wider attention after the uprisings in Ferguson, Missouri, as the most recent iteration of a Black tax. In 2014, the year police officer Darren Wilson killed an unarmed Michael Brown, the city collected $2.5 million from tickets and fines, a fifth of its overall budget—a fifth discounted from property taxes, one might argue. It is no coincidence that in the United States, “paying your debt to society” refers not to taxes but to jail time.

Supply-side asset appreciation started as a technocratic vision for expanded capital investment. It became a grassroots movement when California voters considered Proposition 13, a ballot measure that would freeze property tax assessments at the level they stood at time of purchase. By delinking taxes from property values Prop. 13 removed any downside to asset appreciation for the predominantly white owners who lived in desirable neighborhoods and were able to remain in their homes for the long-term. Predictably, as Kahrl notes, Black voters were the only bloc that opposed the initiative. They undoubtedly recognized that, once again, they would be forced to shoulder a fiscal burden shrugged off by white homeowners. Yet there was more to the politics of Prop. 13. While the measure was authored with the business class in mind, its support depended on a cross-class, intra-racial alliance. White, unionized private sector workers, the adult sons of New Deal-era federal credit programs, sided with their bosses against the feminized and racialized workers of public sector unions. Most iconic here were hard hat-clad construction workers, overwhelmingly male and back then overwhelmingly white. Jenkins situates construction worker unions, which steadfastly excluded Black workers, as major beneficiaries of San Francisco’s infrastructural investment in whiteness, since bond-financed public works kept their labor in demand. Construction workers were also among the most vocal proponents of Prop. 13, Cooper points out. They believed—incorrectly, of course—that Black public school teachers and anyone else paid by California acted as a drain on their hard-earned property taxes, and that it was time to turn off the spigot.

Cooper calls Prop. 13, which passed in 1978, an “insurrection against the welfare state.” More disturbing is sociologist Isaac William Martin’s interpretation of Prop. 13 as an uprising to preserve the welfare state. In addition to freezing property assessments, Prop. 13 blocked a proposed reform that would have standardized tax assessments and done away with the system of “fractional assessment,” in which local assessors used their discretion to calculate tax bills based on only a fraction of the property’s value. Fractional assessment was an informal exemption, nowhere coded in law, but a massive expenditure: Martin calculates it as a subsidy to homeowners totaling $39 billion in 1971 alone, forty times the amount spent on public housing, and the third largest expenditure after social security and Medicare.Footnote ¹⁶ Fractional assessment was the quintessence of lightness, the kind of off-budget—and in this case, unstated—public grant that made housing a site of wealth accumulation. Considered from this angle, tax cuts didn’t gut the welfare state; they built one, hidden but robust in its singular purpose to support the asset-owning class.

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If fiscal lightweightness in the service of property began as a necessary response to the structural constraints of colonialism, it survived as a political choice. The United States could have built a system in which property taxes worked to ensure redistribution rather than asset appreciation. That was, in fact, the idea behind the income tax. The 16th amendment, which legalized a federal income tax in 1913, owed its existence to agrarian populists demanding an assertive tax on northeastern capitalists and their intangible assets at a moment of unprecedented wealth concentration. To meet a succession of crises that followed—a couple world wars and the Great Depression—the income tax spiked in progressivity, reaching 82 percent for the highest income bracket in 1943. More foreign still from our contemporary vantage, income taxes were bolstered by taxes on excess profits, dividends, corporations, and inheritance. These were largely transient developments, rolled back as crises subsided. But the major contours of the World War II tax regime enjoyed a surprisingly long tenure. Blessed with political consensus and cheap borrowing costs, a state largely financed by a progressive graduated income tax at the federal level and property taxes at the state level lasted until the 1980s, when the tax revolt that Prop. 13 launched brought Ronald Reagan to the White House and anti-tax politics to Congress.

An 82 percent tax on the country’s highest incomes is no longer about collecting revenue. There are too few payers in the bracket to make the math add up. It is what Thomas Piketty calls a “confiscatory tax,” a tax meant to make excessive income pointless, to flatten wealth and moot wealth accumulation beyond a point considered grotesque. Confiscatory taxes signal that yawning inequalities are bad and that the state’s active reallocation of wealth is good. The visibility, in other words, is the point. For the same reason, Alexander Hamilton wanted to balance the hiddenness of the tariff with an excise levied directly, so that “the authority of the National Government should be visible in some branch of internal Revenue.” Were citizens not made aware of federal taxation, he worried, “it should beget an impression that it was never to be exercised & next that it ought not to be exercised.”Footnote ¹⁷ Taxing heavily at least normalizes taxation as a legitimate aspect of governance. By contrast, the sort of indirect subsidy and tax prevalent throughout the United States’ history of propping up property ownership makes the fiscal state seem like it has something to be ashamed of.

On the other hand, the more visible the tax, the more easily it becomes a political target. The United States went further than any of its peer nations in establishing a program of progressive taxation in the twentieth century. The same Populists who succeeded in securing the income tax soundly defeated one of its primary competitors, a national sales tax, prevalent across Europe. But the income tax’s half-life shows that progressive taxation does not necessarily translate into progressive politics. Europe’s Value Added Tax and other sales taxes like it have produced welfare states that are far more robust, more than making up for their regressive nature. For Prasad, the sad irony is that Populists mobilized for a tax system that would fall heaviest on capital, but that lacked the political resilience needed to build a durable welfare state. Progressive taxes were immediately riddled with self-inflicted holes, some with major consequences for welfare policy: tax exemptions incentivized employers to provide workers with private benefits, for example, stunting the development of public pensions and health insurance. Sales taxes’ simplicity and frictionlessness—the way they barely register as the iPad swivels back to the barista—might be the secret to their longevity.Footnote ¹⁸

Social welfare rests on the politics of spending as much as taxing—more so, in Prasad’s view. We are much more familiar with the latter: there is no shortage of anti-government tax revolts in the United States’ history. But there were also mobilizations for the government to spend, including mobilizations that were led, poignantly, by the same people hit hardest by the tax state’s heavy hand. Kahrl covers a 1919 protest led by the National Association for the Advancement of Colored People (NAACP) in Atlanta. Black Atlantans demanded new schools, libraries, and paved streets. White people opposed these demands on the basis that they would cost more than Black Atlantans paid in property taxes. That was not true. But even if it had been, the NAACP pointed out, it didn’t matter. What mattered was that Black Atlantans needed those schools, libraries, and streets. Everyone did. “Public funds,” they contended, should be earmarked for “the interest of all of the people.”Footnote ¹⁹