In the early 19th century, a new type of property tax system emerged in the United States, distinguishing itself from its European counterparts by encompassing all forms of property. This tax system, known as the General Property Tax, went beyond the land-based taxes prevalent in Europe and the United States at the time and even included personal and financial wealth. It essentially functioned as one of the earliest versions of a wealth tax.

For almost a century, the General Property Tax was a cornerstone of the U.S. political and economic infrastructure, contributing a significant portion to the revenues of state and local governments. Unlike the European model, which relied more on central government funding, the General Property Tax showcased the American emphasis on local revenues to finance local government.

The prominence of the General Property Tax waned after the 1930s, however, as it was gradually supplanted by different forms of taxation, including the income tax and the sales tax in the early 20th century and a shift of activity from the local and state governments to the Federal government with large-scale new programs such as the New Deal. Today’s property tax in the United States is focused solely on real estate, the value of which varies greatly from region to region, state to state, and county to county across the nation.

An unintended byproduct of the General Property Tax was the detailed documentation it created, which provides a rich, granular historical dataset on U.S. wealth. Drawing on many primary and secondary sources, our new working paper constructs a new dataset that allows us to chart the evolution of national wealth from 1800 to 1935. We provide a comprehensive, localized measures of wealth at state and county levels. The dataset also enables us to study three fundamental issues.

Read the full article about the U.S. General Property Tax by Sacha Dray, Camille Landais and Stefanie Stantcheva at Equitable Growth.