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The Burden of Negro Schooling: Tax Incidence and Racial Redistribution in Postbellum North Carolina

Published online by Cambridge University Press:  03 March 2009

Jonathan B. Pritchett
Jonathan B. Pritchett
Affiliation:
Assistant Professor of Economics, Tulane University, New Orleans, LA 70118.
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Notes and Discussion
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The Journal of Economic History , Volume 49 , Issue 4 , December 1989 , pp. 966 - 973
Copyright
Copyright © The Economic History Association 1989

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References

1 Margo, Robert, “Race Differences in Public School Expenditures: Disfranchisement and School Finance in Louisiana, 1890–1910”, Social Science History, 6 (Winter 1982), pp. 9–33;CrossRefGoogle Scholar and Margo, Robert, Segregated Schools in the American South, 1890–1950 (forthcoming).Google Scholar

2 Kousser, J. Morgan, “Progressivism—for Middle-Class Whites Only: North Carolina Education, 1880–1910”, Journal of Southern History, 46 (05 1980), pp. 169–94;CrossRefGoogle Scholarand Pritchett, Jonathan B., “North Carolina's Public Schools: Growth and Local Taxation”, Social Science History, 9 (Summer 1985), pp. 277–91.Google Scholar

3 See, for example, Margo, Robert, Disenfranchisement and Segregated Schools, 1890–1910 (New York, 1985), p. 93.Google Scholar

4 Smith, Richard Kent, “The Economics of Education and Discrimination in the United States South: 1870–1910” (Ph.D. diss., University of Wisconsin, 1973).Google Scholar

5 Ibid., p. 100. The actual tax burden on blacks may have been outside of Smith's boundary estimates. Smith did not use the assessed value of property owned by blacks to construct his lower boundary but rather the fraction of owner-occupied farms operated by blacks. This may have caused him to overstate the share of property taxes paid by blacks. Smith calculated that blacks paid at least 14.8 percent of property taxes in North Carolina whereas the state auditor listed less than 5 percent of assessed property as owned by blacks in 1910.

6 Kousser, “Progressivism—for Middle-Class Whites Only”.Google Scholar

7 Ibid., p. 194.

8 See Cheung, Steven, The Theory of Share Tenancy (Chicago, 1969).Google Scholar

9 Coon, Charles L., “Public Taxation and Negro Schools”, Proceedings of the Twelfth Conference for Education in the South, Atlanta, GA, 04 14–16, 1909 (Cheyney, PA, 1909), p. 163.Google Scholar

10 Raleigh, NC, News and Observer, September 25, 1909, p. 4. Superintendent Coon later charged that he had been misquoted. In a letter appearing in the News and Observer Coon wrote that his estimates were based on what was due the Negro rather than the actual tax contributions made by blacks. It was his contention that blacks would fare as well under legislation to racially divide public school funds as they did at present. “Surely no sane person will deliberately charge, after a reading of what I did say, that I said that the Negroes of North Carolina actually paid more than they are now receiving for school purposes.”Google ScholarSee Raleigh News and Observer, 09 28, 1909. Coon continued by arguing that Joyner made his calculations in order “to parade the philanthropy of the white race before the admiring gaze of the North”. This could be done only by “placing both feet of the white race in the school fund trough and appealing to the lowest instincts of greed”.Google ScholarSee Raleigh News and Observer, Oct. 17, 1909, p. 20.Google Scholar

11 The share of property taxes paid by blacks may have been even less than 3.7 percent, due to growth of local property taxation to finance public school expenditures at the district level.Google Scholar Blacks were often excluded from those local tax districts, which would have reduced their overall property tax burden. See Pritchett, “North Carolina's Public Schools”.Google Scholar

12 Raleigh News and Observer, Sept. 25, 1909, p. 4.Google Scholar

13 Total public school revenues equaled $2,814,787. Joyner estimated that black tax contributions equaled $252,980, as seen in Table 1. The difference between the two figures equals Joyner's estimate of tax contributions made by whites.Google Scholar

14 Richard Easterlin estimated that per capita personal income for North Carolina in 1900 was only $72. Easterlin, Richard A., “State Income Estimates”, in Kuznets, Simon and Thomas, Dorothy S., Population Redistribution and Economic Growth, United States, 1870–1950, vol. 1 (Philadelphia, 1957), p. 753. Note that accepting Joyner's assumption that blacks paid $57,856 in poll taxes rather than $115,712 would increase the per capita tax burden on whites by less than 4 cents.Google Scholar

15 This possibility was noted by contemporary scholars, who argued that taxes paid by white landowners were passed onto blacks in the form of higher rents, lower wages, or higher prices of consumer products. Some Southerners, however, questioned the ability of the landowner to pass on the tax. See Pickens, William, The New Negro (New York, 1916), p. 164;Google Scholarand Grundy, A. A., “The Problem of the Negro”, American Journal of Politics, 1 (Sept. 1892), pp. 296–97.Google Scholar

16 Personal income is defined as the sum of wage, rental, and interest incomes, while disposable income equals personal income minus direct tax payments to the government plus transfer payments received from the government.

17 U.S. Bureau of the Census, Thirteenth Census of the United States (Washington, DC, 1912), pp. 499–500.Google Scholar

18 This is derived by solving the equation 0.369X + 0.037(1− X) = 0.134.Google Scholar

19 This simplifying assumption appears to be justified given the low property taxes relative to rents found in North Carolina. See Brannen, C. O. and Sanders, J. T., “Taxation of Rented Farms, 1919” (U.S. Department of Agriculture, unpublished memo, 1925). From equation 3, t = dt = r. dT for t close to zero (or T close to one). Dividing both sides of the equation by rT gives the percentage change in T as approximately equal to t/r.Google Scholar

20 If α = 0.413η, then the share of the burden on labor, α/(a + η), is equal to 29.2 percent.Google Scholar

21 See Muth, Richard F., “The Derived Demand for a Productive Factor and the Industrial Supply Curve”, Oxford Economic Papers, 16 (07 1964), p. 226. An extension of this model would allow variation in the price of the final product. Such an extension would require additional information on the share of the final product consumed by each race and the elasticity of demand for the final product. However, most contemporary and current scholars thought the property tax could not be shifted onto the consumer but rather must be shared by the landlord and the tenant.CrossRefGoogle ScholarSee Hunter, M. M., “The Burden of Land Taxes”, Proceeding for the 17th Annual Conference of the National Tax Association (New York, 1925);Google ScholarSeligman, Edwin R., The Shifting and Incidence of Taxation (New York, 1921);Google Scholarand Smith, “The Economics of Education”.Google Scholar

The three-factor case, with land and capital treated as separate factors, is considered in Jonathan Pritchett, B., “The Racial Division of Education Expenditures in the South, 1910” (Ph.D. diss., University of Chicago, 1986), chap. 3.Google Scholar

22 Griliches, Zvi, “Estimates of the Aggregate Agricultural Production for Cross Sectional Data”, Journal of Farm Economics, 45 (05 1963);CrossRefGoogle ScholarFloyd, John E., “The Effects of Farm Price Supports on the Returns to Land and Labor in Agriculture”, Journal of Political Economy, 72 (04 1965), pp. 148–58;CrossRefGoogle ScholarDeCanio, Stephen J., Agriculture in the Postbellum South (Cambridge, MA, 1974), p. 148;Google Scholar and Budd, Edward C., “Factor Shares, 1850–1910”, in Conference on Research in Income and Wealth, Trends in the American Economy in the Nineteenth Century, Studies in Income and Wealth, vol. 24 (Princeton, 1960), pp. 365–406.Google ScholarA short summary of the different empirical estimates of labor's share of total output may be found in DeCanio, Stephen J., “Accumulation and Discrimination in the Postbellum South”, Explorations in Economic History, 16 (04 1979), pp. 187–90.CrossRefGoogle Scholar

23 Wright, Gavin, Old South, New South: Revolutions in the Southern Economy since the Civil War (New York, 1986), pp. 90–98;Google Scholar and Pritchett, Jonathan B., “The Term of Occupancy of Southern Farmers in First Decades of the Twentieth Century”, Historical Methods, 20 (Summer 1987), pp. 107–12.CrossRefGoogle Scholar