Planning for a Diverse and Equitable Future

40 Acres and a Mule: Reparations and the Estate Tax


“40 Acres and a Mule” refers to the unfulfilled promise made to formerly enslaved African Americans after the Civil War, which was intended to provide them with land and resources for economic self-sufficiency. The phrase symbolizes the ongoing struggle for reparations and economic justice for descendants of slaves in the United States.

ACTEC Fellows Sarah Moore Johnson and Raymond C. Odom, began their collaboration through research to better understand the history of slavery, post-slavery US history, reparations and the wealth gap. This presentation is an introduction to the wealth disparity resulting from slavery and Jim Crow laws and its connection to wealth transfer and wealth taxation. Watch the follow-up to this video, A Proposal to Repair Racial Wealth Disparity, to learn more about the proposed solution.




ACTEC Fellow Terrence M. Franklin: The American College of Trust and Estate Counsel includes some of the best and brightest legal minds in the country. Today, you will hear from two Fellows who will explain a difficult topic – the historic wealth disparity between whites and Blacks as a result of slavery and Jim Crow laws. They will also introduce their solution to this problem that plagues our society.

ACTEC Fellow Sarah Moore Johnson: This all started in the summer of 2020.  As I’m sure you all remember, the murder of George Floyd was a raw, open wound and it was an emotional time. Like many of us, I had read Ta-Nehisi Coates’ article on reparations for The Atlantic magazine, and I’d studied up on the racial wealth gap.  I felt strongly that we as a country, owed something to the descendants of slavery.  All of our country’s current racial unrest and wealth disparity is inextricably linked to the institution of slavery and the centuries of injustice that followed.  I just didn’t know what I could do about it.

Then, in the middle of a tax and diversity committee meeting, it hit me. The estate tax could be used to pay for reparations. I put the idea in the Zoom chat, and I could swear I heard someone audibly gasp, so I thought I was on to something. Another ACTEC Fellow connected me with Ray, and Ray can tell you what happened next.

ACTEC Fellow Raymond C. Odom: Sarah, I remember getting a call from a very kind woman who identified herself as an ACTEC Fellow and then she began to talk about how she had this idea of tying together reparations for slavery and for black people with estate tax.  It was like a divine epiphany for me because, as I tell people, I’ve been black all my life, and I have struggled with all the things we’ve struggled with in this country. And I’ve also been a tax attorney struggling with the estate tax throughout my entire 35-plus career year. When I saw these two things together, it immediately caused me to gasp and to really want to pursue researching how these two things that had been the major factors of my life could be brought together in a way that perhaps would help all of us feel better about what was going on in our country right now.

Freedom from Slavery and the Promise of 40 Acres and a Mule

ACTEC Fellow Sarah Moore Johnson:  Together, our research journey led us to some really surprising findings. As an estate planning attorney, history is not my strong suit, so my first order of business was researching the promise of 40 acres to freed slaves. I grew up in the South, and I had heard about “40 acres and a mule” my whole life, but it was always fuzzy. Was it a myth, or was it a reality?

What I learned actually shocked me. Not only did our federal government promise 40 acres to every freed family, it did so multiple times in multiple ways. And in South Carolina and Mississippi, we actually did divide tens of thousands of acres of land into 40-acre plots and either auctioned the plots to freed people or granted them leases with a right to purchase the land.

The most famous of the 40 acres promise was probably General Sherman’s Field Order Number 15. Toward the end of the Civil War, as Sherman and his troops marched from Atlanta to the sea, many enslaved deserters and newly freed people began caravanning behind the troops.  At the peak, estimates suggest nearly 17,000 formerly enslaved people were trailing behind the Union army, which was a bit of a hindrance to the soldiers.  Sherman sought some way to address both their destitution and his need to continue his military mission, unencumbered.

So, he and Secretary of War, Edwin Stanton, gathered twenty Black leaders to come up with a solution to the refugee problem. Garrison Frazier, a former slave from North Carolina who bought his and his wife’s freedom before joining Sherman’s military operation said, “The way we can best take care of ourselves is to have land and turn it and till it by our own labor. We want to be placed on land until we are able to buy it and make it our own.” When Sherman asked whether the freed people would rather live mixed with whites or on their own, Frazier replied that his people preferred to live apart from white people. “For there is a prejudice against us in the South that will take years to get over,” he said. Those were wise words.

Five days later, on January 16, 1865, Sherman issued his famous Special Field Order No. 15, giving the freed people exactly what they had asked for. The order was reserved exclusively for black settlement, the entire coast of South Carolina, Georgia and North Florida. On this land that stretched 200 miles long and 30 miles wide, Sherman ordered, “No white person will be permitted to reside.” And the freedmen would be left to their own control. Each family was to be allotted forty acres of tillable land.  The idea was that the land would be leased for three years, after which time the lots could be sold by the government to the occupants.

Ray and I want to emphasize two important points about this moment in history. First, Sherman intuitively knew that the design for reparations was key. To work, he had to seek a solution from black leaders, and then abide by their request. Ray, this lesson is still playing out today, isn’t it?

ACTEC Fellow Raymond C. Odom:  Yes. It is Sarah. And I think that is really the genius of going back into history to look at General Sherman’s Special Field Order #15 because it proposed a solution of oppression by going to the oppressed group of people.  It rehumanized a people who were dehumanized by, in a sense, rehumanizing them with choice. The ability for self-determination. To me, that is what makes the current situation in our Congress so exciting. There is a bill called H.R. 40, named after the forgotten forty acres.  And in that bill, the same process of assembling eighteen Black leaders who are experts in history and reparative solutions to look again at how we might figure out the best way out of the forgotten forty acres.

ACTEC Fellow Sarah Moore Johnson: The second important point that Ray and I want to emphasize is that the idea behind 40 acres was not a government handout. It was an opportunity. The freed people were required to purchase their forty acres of land, and in many cases, they surrendered their hard-earned savings to do exactly that, only to have it later taken away.  Imagine the wealth that would have been created on those southern coastal lands if Sherman’s order had been allowed to stand.  Today, these are the vacation homes of the wealthy elite.

You all know how the forty-acre promise ended, right? On April 15, 1865, President Lincoln was assassinated and Andrew Johnson took office. Johnson focused on quickly bringing the Southern states back to the Union, and he issued an amnesty proclamation that restored property rights to the Confederates. Just as the freed people began to harvest their first season’s crops on their new land, it was wrested away from them by returning Confederate soldiers.

This was our country’s first broken promise to the freed people.  Later, the federal government again denied wealth creation opportunities to Black Americans through the New Deal and the GI Bill, which granted white Americans, but not their black counterparts, access to the American dream through homeownership opportunities and incentives.  If you ever wondered why there are no black or brown people living in your suburban neighborhood, the answer, as we will explain, probably lies in the GI Bill.

These lost opportunities to create an inheritance laid the foundation of the racial wealth gap, which currently results in white American families having eight to ten times greater wealth than Black American families.  We view the racial wealth gap as a measure of the damages for centuries of slavery, segregation and discrimination our country has inflicted on African Americans.

Ray’s research revealed that the estate tax may just be the perfect funding source to repair these damages.

Estate Tax as a Possible Funding Source to Slavery Reparations

ACTEC Fellow Raymond C. Odom: Sarah, I think the reason you heard a gasp at that committee meeting was because not very many people have ever heard the words estate tax and Black reparations in a sentence together. What’s more important, it brought together something that all of us as estate planners are focused on. Estate tax. Together with something that all of us were feeling at the moment you made that announcement, which was the personal discomfort of racial unrest.

What possible connection could there be between wealth transfer, wealth taxation and slavery? Well, I think the first thing that you have to do is realize that our country’s founders immediately recognized that wealth concentration aided by wealth inheritance is not a good thing.

I know that comes as a bit of a surprise because, in our field as estate planners, our goal is to help wealthy families concentrate their wealth within their families. But you can see how the ultimate extrapolation of that would undo what America was founded to do. Simply look at what England was. It was the concentration of wealth in a monarchy, in a family. And that family began to do, so to speak, the golden rule. He who has all the gold makes all the rules. America’s system, from the beginning, was designed to prevent a monarchy or aristocracy from becoming the ruling class.

The reality is, in addition to slavery being an economic system that made people wealthier, it was a system that deprived an entire people group of any opportunity to have wealth. The reality is that most of us as estate planners are not aware of the fact that around the time estate tax was introduced was at a time when America was experiencing its greatest wealth disparity. Its greatest concentration of wealth in a small group of citizens. In response to that, progressives began to talk about the idea of swollen wealth. The real idea is that in a body politic like America that something could be swollen or out of sorts or toxic to the rest of the country.

I don’t think many people understood that until President Roosevelt and others began to talk about wealth as swollen fortunes. In that reality of a tax designed to address wealth concentrations, they were stumbling on a potential solution for the racial wealth disparity because wealth disparity is not simply a black, white racial problem. Wealth disparity is a problem for all of us. And what’s interesting is that we believe that focusing on the group most disparate would logically, rationally and purposefully lead to the best solution for all. What we think is that when you look at the way America was founded and you look at what slavery played out throughout the four hundred years, the current disparities already mentioned by Sarah become both logical and unsustainable. And we believe that once we as estate planners get a connection between the tax design to prevent disparity and the people group most disparate – well…put it this way. We will remember the forgotten forty acres.

ACTEC Fellow Terrence M. Franklin:  Sarah and Ray did an outstanding job of laying out the history of the “40 acres,” as well as a possible solution through estate tax. Later this year, we will share a follow-up to this video and hear their recommendations to address the issue.

Please visit ACTEC, for more information on this topic and some of the references they used in their research. And make sure you subscribe to ACTEC’s YouTube Channel to be informed of new videos as they become available.

Planning for a Diverse and Equitable Future

ACTEC’s diversity, equity, and inclusivity video series analyzes issues surrounding racism, sexism, and discrimination in all its forms to combat inequality.