Excerpted From: Sarah Moore Johnson and Raymond C. Odom, The Forgotten 40 Acres: How Real Property, Probate & Tax Laws Contributed to the Racial Wealth Gap and How Tax Policy Could Repair It, 57 Real Property, Trust and Estate Law Journal 1 (Spring, 2022) (622 Footnotes) (Full Document)


JohnsonOdomThe story of America's racial history is inextricably bound up with land and wealth. In the infancy of our country, land was limitless and inexpensive, but labor to turn that land into profit was in short supply. Expansion of our country to the Western territories and the question of whether slavery would follow suit ignited the sparks of the Civil War. Confederates fought the Union in part out of fear that, not only would the institution of slavery be abolished, but that their land would be stripped from them and awarded to their slaves.

After the war, the South remained short on cash but rich in land, so rather than paying fair wages, Black Codes and sharecropping were instituted to lock in a labor force. When the Black population spread west and north in the Great Migration, segregationist policies created barriers to land ownership. For people of color who managed to overcome the odds and acquire land or money, our probate laws have allowed it to slip away at death. After the progress of the civil rights movement, anti-tax policies implemented in the 1980s and continued today have created an economic segregation that threatens the continued success of our democracy.

Reparations were expected and were attempted to be awarded after the conclusion of the Civil War, but a series of ill-fated and ill-willed efforts precluded it. Instead, many of the people and governments of this country, including the federal government, reverted to the same racial narrative used to dehumanize Black people and justify slavery. By dehumanizing BlackAmericans, federal, state, and local governments systematically deprived BlackAmericans of property and rights after the Civil War, until race discrimination was officially outlawed by the Civil Rights Act of 1964 and the Fair Housing Act of 1968. Other civilized countries have made monetary awards and sacrifices to correct past wrongs, such as South Africa after apartheid and Germany after the Holocaust. Additionally, the United States has attempted reparations for other groups it has mistreated, such as Native Americans and Asian Americans after World War II.

Our failure as a nation to address the issue of reparations for BlackAmericans has contributed to a new form of racial segregation--economic segregation--in the form of income disparity and the racial wealth gap, which is taking us further away from the democratic ideals on which our country was founded. This Article proposes to use tax policy to repair the racial wealth gap, not just in the form of slavereparations, but as “Blackreparations.” These reparations can be achieved by using the estate tax and new charitable contribution rules to create a public and private partnership that makes both direct payments and community-based payments to BlackAmericans with a focus on the cornerstone of all American rights--property.

Part II begins by providing a historical background on slavery in America and post-Civil War attempts to provide slaveryreparations. Part III explores the ways in which federal and state real property and tax laws have further discriminated against and continue to harm BlackAmericans. Part IV provides specific examples of reparations paid by other countries in connection to the Holocaust and Apartheid, as well as examples of reparations paid by the United States in connection to government seizure of Native American land and the internment of Japanese Americans. Part V discusses options for funding reparations to BlackAmericans through taxes on wealth and property at the local, state, and federal levels.

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The disappointment of partial emancipation suffered by Black people in this country rests, to a significant degree, upon the failure of the Andrew Johnson administration to figure property ownership at the core of what freed people were owed as repair for their enslavement and to recognize their identity as persons, not property. The racial caste system that developed to justify slavery continued in the American psyche, at both the individual level and at all levels of government, for decades to follow. It is not too late to repair the harm. By using the estate tax to fund reparations (starting with a truth-seeking, reconciliation process used in past examples of reparations), we can pivot the country away from the continuing racial wealth divide and shift to the egalitarian promise of Thomas Jefferson, where every person begins life's journey from the same starting line.

Sarah Moore Johnson, Founding Partner, Birchstone Moore LLC. Sarah has a B.S. from Wake Forest University and a J.D. from the University of Georgia School of Law.

Raymond C. Odom, Senior Vice President at Northern Trust, Chicago. He serves as Director of Wealth Transfer Services in the Wealth Management division. Ray has a B.A. from Valparaiso University and a J.D. from The Ohio State - Moritz College of Law.