CREATING A NEW REVENUE SYSTEM
IN 1838 the state tax system began to emerge as a significant issue in Georgia politics. That system rested squarely on the tax act of 1804 and had changed little in format since the eighteenth century, but Georgians had been paying state taxes at reduced rates for many years. Beginning in 1824, the state had slashed its tax rates in half Further reductions had followed, and since 1835 Georgians had paid no poll or property taxes to their state government (see fig. 1.)1
By the late 1830s, however, a return to taxation seemed unavoidable. Taxfree sources of revenue had dried up. Moreover, Georgia had embarked on the Western and Atlantic Railroad, a giant experiment in public enterprise that drained capital from the state's Central Bank and resulted in a growing public debt.2 That debt threatened to grow much larger before the railroad could be completed and could begin to pay its own way and perhaps even contribute profits to the state treasury. While nontax revenues vanished, expenditures rose for debt service.
Thus it was that in 1839 Georgia's newspapers went to press with some words about state finances. The Augusta Constitutionalist acknowledged widespread aversion to direct taxes and anticipated "strong opposition" to any substantial tax hike. Nevertheless, it contended, Georgians must "make up their minds to pay sufficient taxes for the support of the government, until such taxes can be dispensed with, without injury to the public interest." Taxpayers might find solace, however, in the prospect that they "would have to submit to additional burdens only a few years; after which all taxes may be removed, when the people will enjoy the fruits of their sacrifice." Meantime, as the Milledgeville Federal Union expressed the hope, the "deranged state of our finances" might "give rise to a revision of our system, which has always been one of the worst in the world."3
The quest for a tax-free system of state finance was a central feature of antebellum America, yet tax revision, in particular the adoption of