The other day I took a tour of Portland’s Ritz Carlton, the 35-story, five-star hotel and condo to be completed next spring. The condo units, on the upper floors, are selling from $1.3 million for one-bedrooms to $10 million for penthouses. How my friend got on the invite list, she doesn’t know, but she invited me along.
Marketing, our hosts said, is aimed at aging boomers who want to add a downtown residence to their places to hang, hotel accommodations they own rather than rent. (The condo fee is $1-1.10 per foot—say $2500 for a 2400-square-foot two bedroom.) The other market is DINKs (double-income-no-kids) who want a little flash and a lot of amenities. As a sales “ambassador” told us, “people who’ve made it and want to show it.” Sixteen of 138 units have sold.
I’ve been following the Ritz story for three years (and wrote about it then), because its owners are beneficiaries of the signature accomplishment of the GOP Congress during Donald Trump’s first two years. While researching testimony I gave to the Oregon legislature in 2020, I obtained an investment prospectus.
The 2017 “Trump tax bill” featured a provision known as “Opportunity Zones,” the latest iteration of a 30-year-old idea that emerged during the Bush pere administration (which I covered as a tax policy reporter). The idea was that, given sufficient tax incentives, wealthy investors would erase poverty by lifting downtrodden areas with new developments. The reality was something different, as the right-wing Heritage Foundation found in a 2019 study:
“Academic and government studies consistently show place-based development programs fail to increase employment, raise wages, or advance general economic opportunity for targeted residents because they have not addressed the main causes of poverty.”
Yeah, well, alleviating poverty was the pitch, but that’s not what Opportunity Zones are about. They’re about giving the rich tax-free investments. They do so through “Opportunity Funds,” whose managers scour the nation’s 8700 “Opportunity Zones,” census tracts so designated because they met certain poverty criteria. Investors can sell assets, put the money in these funds and delay paying discounted capital gain tax on their old investments for years, then pay nothing on gains from the new investments if held 10 years.
Thus, only rich people can play. Minimum investment is typically six figures.
These new investments work only if the 10-year after-tax returns are greater than investments that don’t have the tax advantages. So investors are drawn only to sure-win projects in downtowns where land is tight. Portland (at least before the pandemic) was such a place. Opportunity Funds invested in New York City, Atlanta, Dallas, L.A., Seattle—you get the idea (research shows that’s where the money has gone). Places that were expensive and guaranteed to get more so, with returns better than the typical 10-12% appreciation of other real estate assets.
Winners and losers
If you owned chunks of land in these and other cities, Opportunity Fund managers came calling. That’s what happened in Portland, where a family real estate business, Downtown Development Group, owns many tracts. One of them was “Block 216,” otherwise vacant land leased to about 50 food carts, small businesses that are incubators for the city’s riotously creative food scene.
In this case, the Ritz project was organized in 2016. Because Congress attached few rules, and because the Trump Treasury Department was run by rent-seekers looking to increase wealth for themselves and associates rather than prevent abuse, the Ritz project was able to reorganize into a new entity in 2019 so that investors could take advantage of the tax benefits.
Who won? The Goodmans, who own the land, which suddenly was of greater value than it had been before Congress bestowed tax benefits; the investors, who stood to receive those tax benefits; and the fund managers, who took their piece.
Who lost? The food cart owners, employees, and customers. Also other renters—business owners and residents—who will find themselves priced out of a more expensive downtown because Congress gave the land greater value.
This is Portland’s trade: out go quirky, bar-going, cart-patronizing lower-rent folk; in come millionaires who don’t have to leave the premises for anything. The Ritz will have an eighth-floor deck, an “owners lounge” where you can gather with your neighbors to make business deals (this was part of the pitch). You can walk your lap dog there and never have to hit the street. Similar projects are on the way.
Opportunity Zones are set to expire at the end of 2026, meaning new investors have until then to take advantage of their tax benefits. Expect an extension to be part of some must-pass legislative vehicle if Republicans retake Congress.
To complement the narratives I posted here over the fall, I selected 63 shots from my drive east from Portland to Independence, Missouri, sometimes more and other times less following the Oregon Trail, in reverse. The Trail, which branched into routes to California and Salt Lake, was the passageway for hundreds of thousands of Americans to settle the West beginning in the late 1830s. An exploration of some of its well documented segments was the first section of my 56-day transcontinental drive.
I’ve used Flickr for years. It’s not terribly intuitive. To see the pics, you have to click on the image of the Gorge, which opens the Flickr page. To see the captions, you have to scroll below each pic. But Flickr includes all the data from the photos, including a mapped location.
On a sunny afternoon in November, I walked up to the Lincoln Memorial and felt a lump rise in my throat, as it has on this transcontinental trek in other places that represent human triumph and suffering: South Pass in Wyoming, where the Oregon Trail overlanders crossed the Rockies; Monroe Elementary in Topeka, from which sprang Brown v. Board; the plain below Cemetery Ridge at Gettysburg, site of Pickett’s Charge. Reading the Second Inaugural (for the hundredth time) and turning to look at the Washington Monument, my eyes welled. This is my sacred temple, my favorite public site in the world, one that leaves me awed in contemplation of the purpose of life, the wonder of creation and the demands of Shiva.
If we shall suppose that American Slavery is one of those offences which, in the providence of God, must needs come, but which, having continued through His appointed time, He now wills to remove, and that He gives to both North and South this terrible war as the woe due to those by whom the offence came, shall we discern therein any departure from those divine attributes which the believers in a Living God always ascribe to Him? Fondly do we hope—fervently do we pray—that this mighty scourge of war may speedily pass away. Yet if God wills that it continue until all the wealth piled by the bond-man’s two hundred and fifty years of unrequited toil shall be sunk, and until every drop of blood drawn with the lash shall be paid by another drawn with the sword, as was said three thousand years ago, so still it must be said, “the judgments of the Lord are true and righteous altogether.”
Three days later I stood at the Jefferson Memorial. It is a beautiful structure that makes me smile. Jefferson’s words are similarly inscribed on its walls. Among them:
I am not an advocate for frequent changes in laws and constitutions, but laws and institutions must go hand in hand with the progress of the human mind. As that becomes more developed, more enlightened, as new discoveries are made, new truths discovered and manners and opinions change, with the change of circumstances, institutions must advance also to keep pace with the times. We might as well require a man to wear still the coat which fitted him when a boy as a civilized society to remain ever under the regimen of their barbarous ancestors.
Jefferson addresses my intellect, a step removed from experience. But Lincoln touches my heart because his words are imbued with suffering.
From these quotations, I began to form an essay on my visits to these two presidents’ homes. On my way east from Portland, I had spent a day walking around Springfield, Illinois. After Washington I was headed to the University of Virginia, where I had learned to write first drafts at The Cavalier Daily and craft second drafts through the history department. Following a newspaper staff reunion, I would spend a day at Monticello, and then think of a third president’s home.
Jefferson’s Monticello and ‘Academical Village‘
The morning after arriving in Charlottesville, I accompanied Sheryl, my college friend of more than four decades, on a walk around the Grounds. First stop was the Memorial to Enslaved People, the 4,000 or so who built and maintained Jefferson’s “Academical Village” from 1817 to 1865. After a decade of student agitation, research, planning and fundraising, the memorial was dedicated in April. It sits between the Rotunda and the Corner, the commercial strip adjacent to the Grounds, and so it is an unavoidable site for any student or visitor. Constructed in the shape of an open shackle, the memorial includes a timeline and the names of those enslaved.
When we walked into the Rotunda, a guide introduced herself and led us on a 90-minute tour of unearthed facts about the university’s embrace of slavery. (The tour is part of freshman orientation.) Ahana, a first-generation Indian-American born in Manhattan, took us to a garden behind one of the 10 pavilions that face the Lawn. A thousand times had I walked through the archways connecting the Lawn and the gardens and never imagined that slaves lived in the basements of the pavilions, the homes of the professors. In Jefferson’s majestic design, an observer on the Lawn is unaware the pavilions even have basements.
Jefferson similarly designed Monticello: A visitor would have to go looking for the slave quarters and workshops in subterranean wings off the mansion. Out of sight, out of mind.
Slavery was largely out of mind until my last tour of Monticello in 2005. It was completely out of mind when I was a student in the late 1970s. Fawn Brodie had published Thomas Jefferson: An Intimate History in 1974, the first modern account of Jefferson’s relationship with Sally Hemings. Around the history department, the vibe was still aligned with resident professor emeritus Dumas Malone’s largely hagiographic biography of Jefferson, the fifth volume of which won the 1975 Pulitzer Prize. White people would learn later that Jefferson’s rape of Hemings was common knowledge in the Charlottesville neighborhoods where their descendants lived.
The Monticello narrative has shifted so much since the Thomas Jefferson Foundation launched its oral history project in 1993 that I hardly recognized the place. From the get-go, tour guides provide a nuanced portrait of the slave-owning drafter of the self-evident truths that has long been available in written studies but not so much at his plantation. Guides on the house tour sketch the Hemings family, including the six children born into slavery fathered by Thomas Jefferson. Sally Hemings was the half-sister of Jefferson’s wife Martha Wayles; Martha’s father, John Wayles, fathered six children borne by Elizabeth (Betty) Hemings; Sally was her youngest.
On the hour-long tour of Mulberry Row, the center of Big House life and industry for enslaved and paid labor, our guide Justin explained how the chattel system in America developed after 30 enslaved Africans were dropped off in Jamestown in 1619. I did not expect he would articulate the purposes of the slave code Virginia enacted in 1662. It designated slavery as hereditary through one’s mother—a break from England and the colonies, where one’s status was determined by the father. The system, Justin explained, was designed to drive a wedge between the interests of enslaved Blacks and White peasants for the benefit of the elite.
I almost blurted to my fellow tourists: And nothing has changed. The aristocracy is still using race to divide the working class.
. . . . aristocrats (the great planters), half-breeds (yeomen who had married into aristocratic families), pretenders (men of wealth not belonging to established families), a solid independent yeomanry, looking askance at those above, yet not venturing to join them, and last and lowest, a seculum of beings, the overseers.
A final anecdote from Justin’s tour: When Jefferson’s paid White craftsmen wrote to warn him that the overseer of his nail factory was drinking his wine, stealing his stores and savagely beating his slaves, Jefferson conceded that the man was harsh, but that he could not imagine an overseer who could better serve his purposes.
Having experienced the Reeducation of Monticello, I thought: What of the Hermitage, Andrew Jackson’s home near Nashville? I had never been there, but had it updated its presumably hagiographic narrative?
Full disclosure: To me Jackson is a villain. He inherited Jefferson’s moribund faction and built it into the Democratic Party, which asserted White Supremacy until Franklin Roosevelt began the long peeling away. At a formative period of our development, he helped extinguish the Era of Good Feelings; displaced Indians and ignored the Supreme Court’s decision to stop doing so (“Let him enforce it”); solidified slavery as a proper relationship between Black and White after post-revolutionary ambivalence; and destroyed the Second Bank of the United States, which led to the Panic of 1837 (and propelled emigration over the Oregon Trail).
Lining the entrance to the Hermitage visitor center hang banners with handsome portraits of Jackson and underneath: “Statesman,” “Legend,” “Hero.” Uh oh. How about the museum present its narrative and leave the judgment to us? I was not encouraged by the stacks of books on a forward table: Jon Meacham’s biography, American Lion, and A Patriot’s History of the United States: From Columbus’s Great Discovery to the War on Terror. A few other biographies and texts on the Indians’ narrative lined the thinly stocked shelves in the rear, but Jackson as “the people’s president” is the museum’s message.
The 17-minute film was frustrating. Meacham, the journalist who writes popular narratives, and several historians offer assertions and place Jackson in his context, but no one articulates why he’s critical to our history. I wondered how I would compose an alternative.
The biographical presentation in the museum is cursory: highlights from birth through the Battle of New Orleans. There are prominent photographs and accompanying narratives of his most trusted enslaved people. The room about his presidency is closed because of Covid-related staffing shortages, perhaps because this is Tennessee, whose governor has followed the DeSantis model of prevention.
Things looked up when our “VIP” tour guide showed up. Tony, the staff preservationist, started as a tour guide; now 50, he’s had one employer in his adult life. Out on the front balcony an hour into our walk, Tony paused in describing the house and its artifacts to urge us to read. He observed that historiography changes over time, and he summarized 27-year-old Arthur Schlesinger Jr.’s Pulitzer-winning Age of Jackson (1946) in the context of the Cold War: Jackson as a democrat who took power from the elite that had presided over the government from its founding, and who thought the Second Bank of the United States put too much power in a central, corrupt authority. Jackson imbued the presidency with power to set policy that Madison had not contemplated. He vetoed more bills (12) than all his predecessors combined, and he drove Congress to his will by claiming an electoral mandate.
The two knocks against Jackson in our time, Tony said, were his advocacy of slavery and prosecution of various wars against Indians and their removal by civilian authorities throughout his administration. But the 1838 Trail of Tears—the military’s forced march of the Cherokees—occurred under “another administration.” That would be his second vice president and successor, Martin Van Buren, who in my view was the architect of Jackson’s divide-and-conquer control of Congress.
Tony’s house tour and the grounds’ display panels were extensive in their interpretation of a slave plantation. Jackson followed the South’s boom-and-bust economic model: In flush years, buy more land and slaves; in downturns, accumulate debt. Jackson ultimately acquired about 1,000 acres and 150 slaves. The Hermitage website is clear-eyed: Jackson’s purpose was to make money from King Cotton, “which ruled the daily lives of the enslaved.”
Although a minor sector within larger southern society, this elite plantation aristocracy controlled the majority of wealth and power in a primarily agricultural-driven landscape. Their cash crop was cotton, and “King Cotton” ruled with a heavy hand throughout southern plantations.
The Andrew Jackson Foundation has undertaken terrific archeology, and it explains particulars of the Hermitage economy and Jackson’s slave management (unlike Jefferson, he broke up no families). The work has been smoother because the plantation passed from the family to the Ladies Hermitage Association, Nashville women dedicated to preserving it. By contrast, Monticello and its artifacts passed out of the Jefferson family (to pay off debts) before coming into institutional preservation. The furnishings in the Hermitage were there when Jackson died in 1845 or are exact reproductions.
Also unlike Monticello, the foundation lacks an endowment and Second Gilded Age sugar daddies. David Rubenstein, who funded Monticello’s visitor center among other patriotic philanthropies, has not similarly financed the Hermitage (Tony told me they’ve worked connections). It relies on visitor fees, modest gifts, and the occasional appropriation from the state legislature.
I come away less certain of Jackson’s legacy. I have long considered him a great president. He transformed the nation, furthering Jefferson’s Atlantic-to-Pacific vision and setting the course for Manifest Destiny: John Tyler’s annexation of Texas and James Polk’s conquest of the southwest and peaceful settling of the northwest border with Britain. He forged the political consensus among Whigs as well as Democrats that that the United States was a country for White people. From that consensus sprouted both the abolitionist movement and John Calhoun’s theory of nullification, though Jackson was a staunch Unionist and considered Calhoun (his first vice president) a traitor. At the end of our tête-à-tête, Tony admitted he didn’t like Jackson because he believes in republican government. So do I.
I move from our seventh president to our 16th and the context in which he saved the union from the inevitable clash over slavery his predecessors had set up.
Like Jefferson and Jackson, Lincoln was a product of his place and occupation. He was not a planter but a lawyer, and his travels on the judicial circuit put him in touch with ordinary concerns. Before he was 20, he had piloted a flatboat down the Mississippi to New Orleans, observing trade—and slavery—along the way. He came to maturity in a growing city, the new state capital. His emergence as an opponent of slavery fit a state whose concern was the threat posed to free White labor by the expansion of the Peculiar Institution on Illinois’ borders. His party, the Whigs, favored diversified economic development over territorial expansion, and Lincoln railed against Polk’s Mexican War.
In the state capital, Lincoln’s image is everywhere: government buildings, park squares, commercial establishments. The National Park Service has restored a four-block area to the period Lincoln lived in it, from 1844 to 1861. The neighborhood sets a scene for people of means, and by the time Lincoln lived here, seven years after he’d moved from New Salem and received his law license, he had some. I took a tour of his house with two other tourists led by a volunteer named Ken, who noted that its kitchen was bigger than the log cabin Abe lived in as a boy. Several adjacent houses are open for exhibits. Among the vacant lots is that of Jameson Jenkins, a Black conductor of the Underground Railroad who gave the president-elect a ride to the train station for his journey to Washington.
Up the street is the old state capitol, restored to its appearance when Lincoln served in its House. I walked through the chamber in which he delivered the “house divided” speech as the Republican candidate for Senate in 1858. In it he argued that his opponent, Senator Stephen Douglas, architect of the Compromise of 1850, had conspired with Presidents Franklin Pierce and James Buchanan and Chief Justice Roger Taney (author of Dred Scott) to allow the expansion of slavery into free states. A capitol employee noted that Lincoln had rehearsed it with friends in the library; all urged him not to give it—too radical. Indeed, the legislature reelected Douglas. But the national response was electric, and it propelled the obscure, self-taught lawyer and former one-term representative to the presidency.
Two miles north of the Capitol is Oak Ridge Cemetery, site of Lincoln’s tomb. At the ground level of a stair-stepped pyramid, I pushed open an imposing, black steel door. A tour guide sat alone and answered my questions. Yes, his casket was opened in 1901 during a crypt renovation directed by Robert Todd Lincoln; a worker brought along his 14-year-old son; Fleetwood Lindley, the last person to see the body, recounted the experience shortly before his death in 1963. My guide said it was well preserved, Lincoln’s face colored bronze, like the statues that line the four corners and entry of the tomb. The body lies in a steel vault inside poured concrete, 10 feet below ground, behind a marble wall; those of Mary Todd and their four children are sealed in a wall toward the center of the tomb. In a thousand years, archeologists will surmise that this was an important pharaoh. I mull how he saved us from despotism by imposing it.
Lincoln rewrote the Constitution and our underlying compact: by refusing to accept secession, denying habeas corpus, suppressing free speech, and issuing the Emancipation Proclamation. He pushed Congress to replace the Three-Fifths Compromise with the Thirteenth Amendment, which set the stage for the Fourteenth and Fifteenth. (For more than two decades, the Rehnquist and Roberts Supreme Courts have been chipping away at the latter two.)
Another sculpture in town depicts the 1908 Springfield “Race Riot.” After the sheriff smuggled two Black men accused of high crimes out of town for their safety, a White mob lynched two innocent Black men and burned homes and businesses in violence that went on for days. Subsequently, Mabel Hallam, a White woman who had accused George Richardson of rape, confessed she’d sought to cover up an affair with a White man. Joe James, 17, the other Black suspect, was convicted of murder and executed. The violence, covered nationally, contributed to the founding of the NAACP the following year.
White men still lynch Black men; recently we saw one on a homemade video in Brunswick, Georgia. Police, acting on our behalf, kill Black people daily. Republican-controlled state legislatures spent 2021 trying to ban the teaching of The New York Times’ “The 1619 Project,” now a book, in public schools. This month in Virginia, a private-equity tycoon based his campaign for governor on denying race as a formative factor in our history and contemporary life. I had thought my former home state had turned the corner after rejecting the dog whistles of statewide Republican candidates for the last 12 years. But this fall, while the statue of Robert E. Lee finally was removed from Richmond’s Monument Avenue, Glenn Youngkin campaigned, successfully, against “critical race theory.” Our politics as Newton’s third law:
We are still wearing the coat that fitted us as children, and the aristocracy is still using race to divide the working class.
In Charlottesville, I happened by a bright blue plaque on what was until recently Jackson Park, named for Stonewall Jackson. Also until recently, the park featured an equestrian statue of Jackson, installed 100 years ago, after Paul Goodloe McIntire deeded the land to the city on the condition that the grounds would bear no other statue. The installation took place during a Confederate reunion, 56 years after the war.
The plaque was installed in 2019 by the Equal Justice Initiative. It described the 1898 lynching of John Henry James, about four miles west of town. James, an ice cream vendor, was accused of sexually assaulting a white woman. The sheriff took him over Afton Mountain to Staunton to deter lynching, but the next day he brought him back by train to face a grand jury. A mob of 150 White men awaited the train at Wood’s Crossing, hauled him off, and hung him from a locust tree, according to an account in the Charlottesville Daily Progress. The mob riddled his body with bullets, and then cut off pieces of his clothing and body as souvenirs. The grand jury posthumously indicted him.
Six days after passing what is now Court Square Park (which no longer contains the Jackson statue), I drove up to the National Memorial for Peace and Justice in Montgomery, Alabama. And burst into sobs.
Informally known as the National Lynching Memorial, the park also is the creation of the Equal Justice Initiative. It sits on six acres on a hill above downtown. At its center is a hollow square structure lined with 800 rust-colored metal boxes, shaped like coffins and suspended from rafters. On each box, representing a county where a lynching took place between 1877 and 1950, are stenciled the names and dates of the more than 4,000 victims EJI has documented in 836 counties. The effect is similar to that of Maya Lin’s Vietnam War Memorial on the National Mall: I soon began looking for the boxes representing the dozen counties I’ve lived in. Nearly all of them (in Texas, North Carolina, Virginia, New York, Florida and Oregon) have a box.
I did not want to come to Alabama. I could have gone the rest of my life without traveling in the Deep South again. But here I am, compelled to bear witness and share my experience.
On a bright, sunny Saturday, I walked up Dexter Avenue, excited to stand in front of the church whose pulpit was Martin Luther King Jr.’s from 1954 to 1960. After a reverential pause, I continued up the street and stood in front of the Alabama State Capitol and felt revulsion. Here evil dwelled, and it still dwells.
Quickly that feeling passed, succeeded by the recognition that without dark, there is no light. Had not a string of governors stood in the doorway spewing their hate of fellow beings because of the hue of their skin, the nation would not have watched events unfold here, beginning with the Montgomery Bus Boycott, of which 26-year-old King became spokesman. Congress might not have passed the 1964 Civil Rights Act. Had not state police beaten peaceful marchers at the Edmund Pettus Bridge in March 1965, Lyndon Johnson would not have told Congress, “We shall overcome,” and we would not have had the Voting Rights Act.
Down the hill from the capitol is EJI’s brand new Legacy Museum, its design no doubt inspired by the African American History Museum in Washington and for me at least as powerful. The museum describes in words and images our history in four eras: (1) the rise of the Atlantic slave trade, during which 12 million people were kidnapped from Africa and shipped to the Americas, and the 246 years in which 400,000 Africans and their millions of descendants created wealth for White America; (2) racial terror under Jim Crow, in which slavery evolved into contract and convict labor accompanied by lynching, all of which spurred the Great Migration of 6 million Blacks to the North and West; (3) “Segregation Forever,” the period between Brown v. Board and the high water marks of the Civil Rights Movement that ended with the assassination of King and the election of Richard Nixon that marked the beginning of our retreat from equality; and (4) our infatuation with mass incarceration and unequal criminal justice from the street to the courthouse, resulting in one out of three Black men doing time. (The museum doesn’t detail it yet, but Era 5 is the Supreme Court’s determination to roll back civil and voting rights under Rehnquist and Roberts and the wave of voter suppression laws in GOP states.)
Among the exhibits in the museum are, so far, about 800 one-gallon Mason jars containing soil collected from documented lynching sites. The soil from the spot on which the blood of John Henry James dripped is in one of the jars.
I told the guide who took my $5 ticket: If you don’t know what the lynching memorial represents, then seeing it, as I had from the parking lot, has no effect. But I did know. And I recalled the quotation inscribed at the Jefferson Memorial: “Indeed I tremble for my country when I reflect that God is just, that His justice cannot sleep forever.”
The campuses of Washington & Lee University and Virginia Military Institute abut each other. W&L looks like a classical college: Roman Revival architecture, painted red brick, white columns. Stately. The main road through W&L runs north past the Colonnade, its early buildings, and through a gate into VMI. It’s a jarring shift to Gothic Revival—think jousting knights in front of Medieval castles—brick painted a faded green.
The road opens to the parade ground. Wrapping around the far end to the north is a single, enormous building, perhaps 250 yards wide, concave angles forming three sections. As I approach, a bronze statue comes into view: George Marshall, the school’s most revered alumnus. On opposite sides of the center archway, behind the statue, are plaques with quotes from Presidents Eisenhower and Truman extolling Marshall’s virtues as army chief of staff and later secretary of state and then defense.
Through three archways, behind the castle-like façade, are the cadet barracks, four stories tall, whose design is a cross of prison and public housing. On the walled courtyard of each section stands a uniformed cadet, rifle at his side. Each cadet that passed me on my stroll offered a crisp “Morning, sir.” The first-year cadets, or “rats,” are easy to identify: they stride at right angles.
I walk back around the west side of the parade ground. Facing it are large houses, same Medieval architecture—the homes of faculty members. At the door of each is a plaque with the name of the resident and his “Mrs.” Beyond the houses are the Blue Ridge Mountains.
The effect on me is awe. I consider what would have a teenager—especially a woman—choose this institution, founded in 1839 as a state-funded undergraduate college. Its 1,700 cadets (220 are women) choose one of the military branches to serve upon matriculation. They study the liberal arts and the science of war. They learn discipline, service, discomfort, endurance. Marshall is everywhere. In the courtyard next to the Marshall Hall Center for Leadership and Ethics, a quotation from a speech in Washington in November 1945 is inscribed on a wall: “It is to you men and women of this great citizen-army who carried this nation to victory that we must look for leadership in the critical years ahead. You are young and vigorous, and your services as informed citizens will be necessary to the peace and prosperity of the world.”
I walk back through Washington & Lee. Students and faculty, passersby on largely empty sidewalks, greet me with a casual “hi.” (I see students in classrooms through the windows.) W&L’s enrollment is about 1,800; slightly more than half are women.
It’s had several names through its history. Founded in 1749 as Augusta College, it was moved to Lexington as Liberty Hall Academy in 1782. In 1796, George Washington gave it 100 shares of James River Canal Company stock, which the Virginia General Assembly had gifted him. In 1865, the Washington College board offered the presidency to Robert E. Lee, who had been superintendent of West Point before the Civil War. In a letter to his wife, Lee wrote: “Life is indeed gliding away and I have nothing good to show for mine that is past. I pray I may be spared to accomplish something for the benefit of mankind and the honour of God.” In his five-year tenure, Lee incorporated the local law school, instituted undergraduate courses in business and journalism, introduced modern languages and applied mathematics, and expanded offerings in the natural sciences. Upon his death in 1870, the board added his name to Washington’s. Today it enjoys a good reputation among small liberal arts colleges.
As at the University of Virginia (narrative to come on that), W&L has begun to confront its racial history, at least outwardly. A plaque on one end of the Colonnade outlines “A Difficult, Yet Undeniable, History” of the college’s ownership of enslaved people. It concludes with a 2016 quote from the university’s president: “Acknowledging the history record . . . requires coming to terms with, and accepting responsibility for, a part of our past that we wish had been different, but that we cannot ignore.” It’s not clear what “accepting responsibility” looks like, at least from a plaque.
On the edge of the campus is Grace Episcopal Church, established in 1840 amid a primarily Presbyterian population. One mission was instilling religious values among the students of both schools. At his last vestry meeting, Washington College President Lee proposed a new building. The church was renamed R.E. Lee Memorial in 1903, when honoring the Lost Cause was all the rage in America. One month after the 2017 Nazi riot in Charlottesville, the board voted, 7-5, to change the name back to Grace Episcopal Church. The Richmond Times-Dispatch reported:
“It’s been a very divisive issue for two years,” said the Rev. Tom Crittenden, the church’s rector. “But Charlottesville seems to have moved us to this point. Not that we have a different view of Lee historically in our church, but we have appreciation for our need to move on.”
The second half of my Oregon Trail journey, west to east, began at Riverton, Wyoming, on the Mississippi side of the Continental Divide, where the Rendezvous of 1838 took place. The Rendezvous was an annual convention in the wilderness for American/English/French explorers, trappers, traders and Indians that took place somewhere on the high plains for 15 years. In 1822, William Ashley cofounded the Rocky Mountain Fur Company and advertised for “enterprising young men, to ascend the river Missouri to its source, there to be employed for one, two, or three years.” His men became known as “Ashley’s Hundred,” and their Rendezvous continued until 1840, when the market for beaver pelts collapsed.
Brown road signs (our standard for cultural attractions) are posted on the highway in Riverton. The Rendezvous site is on a bend in the Wind River, at the southeast corner of the Wind River Reservation, past decaying mobile-home parks and industrial buildings on a rutted road. No sign narrates its significance. If you didn’t know about the Rendezvous, the site is a gravel lot with a boat ramp. To me, having imagined it from books, it was hallowed ground.
The day before, at the Route 28 rest stop down the hill from South Pass, I had noticed the Sweetwater River running under the highway. About a hundred miles east, the Sweetwater cuts through Devil’s Gate, a volcanic cliff 400 feet high. I turned left off the highway and spent a couple hours here. Just west of the cut is Martin’s Cove, a nook in the hillside that takes its name from a group of Mormons who tried to make the trip to Salt Lake too late in the season and took “shelter” there. The LDS church owns some of the land and, after a political squall, leased more from the Bureau of Land Management.
Brigham Young sought to bring emigrants from the British Isles, and several thousand made the trek in the late 1850s. Young decided the emigrants, departing with guides from Iowa City, could push and pull $10 handcarts rather than walk beside oxen-led wagons. Many made the journey without incident. But two of these handcart companies, led by men named Martin and Willie, were delayed in 1856. A series of events culminated in the deaths, between Fort Laramie and Martin’s Cove, of perhaps 20 percent of the parties, twice the typical fatality rate on the Oregon/California/Mormon Trail. No one knows precisely how many people died of hunger, cold and disease.
In 1872, Tom Sun built a homestead a few hundred yards up from Devil’s Gate. The Sun Ranch is across the Trail from Fort Seminoe, still standing, a supply station founded by a Frenchman, Charles Lajeunesse. The ranch, the fort and the fissure are the focus of this site, sacred to the LDS. It’s a place for me to contemplate the Trail and its costs.
A friendly LDS couple have been volunteer hosts here since April. We discussed the disastrous judgment of Martin and Willie. Devil’s Gate is only six miles west of Independence Rock, another landmark on the Trail, so named because the conventional wisdom was that Overlanders needed to arrive by July 4 to make it through Oregon’s Blue Mountains before winter. (Of course, Salt Lake is closer than Oregon, but the rock should have given them pause before leaving Fort Laramie, far to the east.) I remarked to my hosts that what we see here is man’s dilemma: the belief that God will provide versus the corresponding faith that God gave us brains to abort a mission ahead of predictable conditions, like the arrival of winter on a windswept prairie.
The whole day from Riverton, 268 miles, was a humbling experience in Wyoming’s great emptiness: mountains and sagebrush and undulations and striking stone landmarks that guided the Overlanders toward the horizon. The frosted morning gave way to a pleasant afternoon in the 50s after my elevation fell to 5000 feet at Casper. There I stopped at one of the Trail’s interpretive centers, an impressive collection of artifacts and narrative-telling. But I was psychically and physically exhausted from contemplating the journey of two centuries ago. At dark I stopped at a motel in Wheatland, a dot in the middle of landscape.
The Guernsey Ruts
The next morning brought surprises and pleasures on the border approaching Nebraska. At the Guernsey Ruts, wagon wheels cut sandstone into a roadway next to the North Platte. The ruts illustrate the Overlanders’ numbers, more than a half-million in the middle decades of the 1800s. Just downriver is Register Cliff, where the passing Emigrants chiseled their names into rock—beside faded petroglyphs carved by previous passersby, and where people continue to carve their names, or in one case an opinion: “Fuck Trump.”
Guernsey is upriver from Fort Laramie, the first settlement in Wyoming and then the logistical base for the U.S. Army’s war against the Indians of the Northern Plains. Many of the buildings were restored in the 1950s; others are ruins. I’m not terribly interested in military operations on this trip; it’s the courage and imagination of the trappers, explorers and Overlanders following Indian paths that grip me. Clayton, a Park Service ranger who’s spent a decade at the fort, was only too happy to find a fellow history student; our conversation, uninterrupted by any other visitor over 45 minutes, ranged from historiography to journalism to favorite authors and their works. He directed me to the next Trail highlight.
That was over the Nebraska border and unmarked by road signs. The Rubidoux Pass is an early Emigrant trail that marks a topographical shift from the Great Plains to the uplifts of Wyoming. A dirt road runs by the edge of it: a wide, gentle swath with a panoramic view east and west. After a few years the Overlanders shifted north to Scott’s Bluff, a landmark with a steeper climb but closer to the North Platte, on the butte’s north side. The Park Service has built a road to its summit, a majestic view in all directions. Hiram Scott was one of “Ashley’s Hundred”; he got sick on the way to the 1828 Rendezvous and was left behind. When the company returned the following year and found a skeleton, they named the pass for him.
A hundred miles east of Scott’s Bluff, I camped on the shore of Lake McConaughy, created by a dam on the North Platte. The next morning I stopped in Lexington at the Dawson County Historical Museum, a collection of folk objects since the pioneer days: a few buildings were moved here, and a warehouse displays cars, a biplane, a barber shop, agricultural implements, household goods, and military uniforms from wars over a century. I met a woman who had grown up in the county, lived all over the place (including Portland, where she drove Uber for four years), and in later life moved home to marry a high school sweetheart she’d rediscovered on Mark Zuckerberg’s evil empire.
A few miles east, the Phelps County Historical Society maintains a shrine to the Plum Creek Massacre on the south edge of the Platte. Over two days in August 1864, the Sioux, Cheyenne and Arapaho mounted a coordinated attack on White settlements across the region in a vain effort to reverse the tide of encroachment. Missing from the narrative is any mention that the Emigrants, bolstered by the aggression of the U.S. Army, were transforming prairie grass into farms and chasing away the bison. Instead the plaques focus on the day: “Ranches, stage stations, homesteaders’ cabins, and wagon trains were attacked and burned. Men, women and children were killed outright or captured. Some captives were tortured and killed, some were ransomed.”
I veered north of the Oregon Trail at Kearny, site of the Archway, a museum straddling the highway, and spent the night in Lincoln, Nebraska’s second largest city. (Six Saturdays each fall, the state’s third largest is inside the stadium where the Cornhuskers play football.)
The Homestead Act
Forty miles south of Lincoln, within a stone’s throw of the Big Blue River and not far from the Trail, is Homestead National Historical Park. It sits on the first land patent deeded under the 1862 Homestead Act, which provided title to settlers who filed claims of 160 acres (a quarter-section under Jefferson’s 1785 township system) and lived on and improved it over five years. The first grant went to Union scout Daniel Freeman, who filed his claim on New Year’s Day 1863 and lived there until his death in 1908. (This would be context for the Plum Creek Massacre the following year.)
The federal government processed 1.6 million homestead applications over the next seven decades, constituting a tenth of U.S. lands in the Lower 48. The act transformed the country by deeding land to settlers who would ensure American-style productivity—preferably on small farms, though loopholes allowed speculators and aggregated holdings. In Beatrice, Nebraska, the Park Service has built a visitor center on Freeman’s grant and restored prairie grass on a swath of it. The center explains the transformation that resulted from the law; the last exhibit is a video featuring claimants’ descendants, many still farming. The Homestead Act was repealed in 1976 except for a 10-year extension in Alaska.
Within the park is the Freeman School, built by an unrelated Thomas Freeman in 1872. In 1899, teacher Edith Beecher was found to be teaching the Bible and hymns to her students. When Daniel Freeman asked the local school board to order her to stop, the school board refused, a decision upheld in district court. But the Nebraska Supreme Court reversed, finding that Beecher’s activities were sectarian in violation of the state constitution. Which is to say, courts removed religion from our schools long before our culture was invaded by rock ’n roll, hip hop, and firearms.
About a hundred miles southeast of Beatrice is Monroe Elementary School. Linda Brown attended the school, 21 blocks from her family’s home in 1951. When her father Oliver tried to enroll Linda at a school four blocks away, the school board of Topeka, Kansas, denied her admission because of her race. Unlike other schools that became part of the consolidated Brown v. Board (like those of Prince Edward County, Virginia), Topeka’s segregated schools were of similar construction. The thrust of the NAACP’s argument was that “separate but equal” branded Black children as inferior, leading to worse outcomes for them. The Supreme Court based its unanimous decision on that evidence.
In 2004, Monroe Elementary became a museum for the history of post-Civil War segregation and the racism that still characterizes our society. The first thing you see upon walking in the door are the “White” and “Colored” signs hanging in the front hall (they were not there when it was a school for Black kids). The park ranger, a Kansas native, told me that every few months, a visitor bursts into tears upon crossing the threshold. We are within living memory of that America.
I went on to Kansas City. The next morning, my Warmshowers host, Mark, was pleased to bike with me 11 miles east to Independence. (Like a typical local, he’d never been.)
The end and the beginning
Why did the Oregon Trail begin at Independence? The Park Service ranger at Harry Truman’s house, our first stop, explained that the village was well watered by springs and four miles south of the Missouri, and Overlanders might arrive there by boat from St. Louis. In 1821, the Santa Fe Trail was established a hundred miles east at Franklin (following Lewis and Clark’s 1803 route). The Santa Fe was devised after Mexico defeated Spain, which like King George III had barred international trade between its New World colony and other countries. An infrastructure of suppliers—blacksmiths, wagon makers, merchants—had grown up by the time Independence was designated the Jackson County seat in 1827.
After standing in front of the Chicago & Alton Railroad station in town on Sunday, I returned Monday morning on my way east to find the site in McCoy Park I had biked past the day before. A gazebo shelters signs that explain the town’s early development, such as the mule-drawn railroad that rolled from the town square down to the river after 1849.
Independence is a beautiful town with stately homes. But like many similar communities, it’s been ravaged by covid. The Harry Truman house is closed because its rooms are too small. The National Archives’ Truman Presidential Library is closed. The trail museum, privately owned, has limited hours three days a week. Many storefronts on the otherwise handsome courthouse square are vacant. Amid the distress, one store keeps hours. “Wild About Harry” is “a shop for guys that caters to what guys like.”
My 13-day journey from the Trail’s end at Oregon City, a few miles up the Willamette from my home in Portland, leaves me with a couple conclusions. One is that life in the states in the late 1830s was tough. The Panic of 1837, brought on by the shrinking of credit that followed Andrew Jackson’s closure of the Bank of the United States (predecessor to the Federal Reserve), diminished opportunity. So did the South’s slave plantations. Striking out for the Willamette Valley or Salt Lake City or California held promise, encouraged by positive reports from waves of pioneers. One in 10 Overlanders died on the Trail from sickness, accidents, homicide, etc. That was about the same share of the population that died at home.
The other is the debt the Emigrants owed to all those who had gone before—other Overlanders, trappers and explorers before them, Indians, migrating ungulates that maintained trails across the continent for millennia. We are in their debt too. I drove on U.S. 26 and 30, which run along or parallel to Interstates 84 and 80, or state roads near them. Dirt and gravel strips followed the Oregon Trail, and the Trail followed the rivers: Missouri, Platte, Sweetwater, Snake, Columbia. We no longer know why we go where we go. But the mule deer remember.
I had imagined this day as the climax of my Oregon Trail-in-reverse, the one on which I would cross the Continental Divide at South Pass, the 20-mile-wide flat in the Wyoming Rockies that trapper Robert Stuart “discovered” in 1812 and Jedidiah Smith “rediscovered” a decade later, when explorers began mapping routes to the Pacific. I felt raw, exposed, connected—with nature, the bitter weather, the vast emptiness, the past and present as one.
It’s an abstraction to read of characters and their adventures. It feels real to stand on the paths they trod, wagon ruts still visible. To do it on a cold, gray, blustery day with snow threatening and few other travelers on the road is overwhelming. My heart was in my throat as I drove off pavement onto muddy roads to see the spot where the Oregon Trail crosses the Divide (7,411 feet above sea level) in sight of the Twin Mounds; where in 1847 explorer Jim Bridger conferred with Brigham Young about routes to Salt Lake; where in 1846 the Donner Party broke south on a new route to California.
These names in my books—Bridger, Stuart, Young, Donner—blazed marks for generations that followed this trail. Explorers diverged for the sake of diversion. Some emigrants had the intuition and courage to try shortcuts unknown; others headed for new destinations. Their technology changed: walking to wagon, Pony Express to telegraph, railroad to highway. But the paths aren’t new; peoples have traveled them for 10,000 years.
I started out at dawn, in rain and wind, from a campsite next to the reservoir created by the 1958 damming of the Green River in Flaming Gorge (part of the water supply for Los Angeles). The water line is at 6,000 feet above the sea; the county road from the reservoir rises over 10 miles to 7,300 feet at US 191. Halfway up, the rain became snow, and once on the highway the lanes disappeared. (I explain that I suffer from driving-in-snow PTSD, thanks to a trip in April into the Blue Mountains, in which I got snowbound overnight. Nothing uncomfortable about that experience except the loss of control; I enjoyed the moment, but leaving my van marooned on a desolate road for 13 days was an experience I need not repeat.) I was grateful the snow this morning was no worse. Also grateful I wasn’t in a covered wagon, heading for parts unimagined.
Tonight I checked into a hotel, after a week of camping, on the Wind River Reservation, which holds the remnants of two recognized tribes, the Eastern Shoshone and the Northern Arapaho. Before the United States took their land, many tribes lived where the Great Basin, through which I just passed, meets the Great Plains that roll down to the Missouri River, 500 miles east. In 1868 Chief Washakie agreed to the Fort Bridger Treaty that ceded tribal lands; he remained committed to its terms for the rest of his life, even as the United States shrank the reservation further. The least I can do is support their hotel/casino (which upstairs is like a Hampton Inn but costs about half as much).
A few days ago, I stopped at Fort Bridger, named for the iconic Mountain Man who had earlier established a trading post on the site. There I felt the same awe I felt today, to be walking on Jim Bridger’s path. (Bridger married Washakie’s daughter.) Bridger, one of those former beaver trappers (noted in my pre-trip narrative) who made another life guiding emigrants west, preferred exploring to store-managing. The curator of the Wyoming state park that bears Bridger’s name told me that the trading post had two flag poles: one for the U.S. flag, the other, plain red, indicating Bridger was on grounds. The red one rarely flew.
Weeks after the overlanders to Oregon stopped at Bridger’s store, they crossed—or didn’t—the Snake River east of what became Boise. I was there five days ago, traveling in the opposite direction. I’ll tell this chapter as I saw it.
Bonneville Point is a promontory east of the Boise Valley. Before the White Man came, it was an overlook on a tribal trail. In 1833, Army Captain Benjamin Bonneville led an expedition along the trail; upon reaching the hill and seeing the lush valley below, he is said to have exclaimed, Les bois! – “the woods!” Thus Boise was named.
From this hill I drove about 50 miles east over dirt roads that crossed and paralleled the route Bonneville and others sketched out for the American emigrants who would begin trekking a decade later. By the time I got to Glenns Ferry, a town built where the overlanders had floated their wagons to the north side of the Snake, I was toast. I had puttered along for about four hours, stopping to examine wagon ruts, stage stations and other ruins, and I was exhausted just thinking about crossing this desert on foot or in a wagon, focused on the distance to the next creek. I’ve had something like that feeling: One day on my bike, I rode a hundred miles on the Washington side of the Columbia; mostly I thought about my water supply, though fully aware I could stop at any farmstead for a refill. The overlanders lacked that option. And when I checked in at Three Island Crossing State Park in Glenns Ferry, I rinsed off the dust that coated my van inside and out and treated myself to a shower. The emigrants did not.
It’s on the opposite bank from Glenns Ferry that the overlanders had a difficult decision, having arrived there in August after four or five months walking the trail: continue on the longer, drier, rockier southern route to Fort Boise, or cross at the Three Islands to occasional streams and food for their stock. The crossing was dangerous, and it still is. A neighboring camper told me locals used to stage an annual reenactment of the river crossing a few hundred yards south of our park, but they gave it up after drowning too many mules and oxen.
Most of us have no clue of such hardships. But we could go talk to the people who make their way from Central America to the Rio Grande for insight into a contemporary example.
As a history student and native of the South, I’ve spent most of my life immersed in our Peculiar region, the soil in which the blood of Black and White was mixed. The foundation of American capitalism was slavery, and it remains a system of exploitation particularly targeting those not White (Anglo-Saxon Protestant). I’d not focused on Manifest Destiny, an ideology racist as well as nationalistic. Moving to Oregon three years ago opened a new field for me, and I’ve been mulling what’s different and what’s the same west of the 100th longitude.
I am reawakened to the reality of Far West settlement at nearly every civic/political meeting I attend: The convenor notes that we meet on the ancestral lands of the Multnomah, Kathlamet, Clackamas, Chinook, Tualatin Kalapuya, Molalla.
The patterns of Western settlement were different from those in the East, but they arose from its politics. Washington and Jefferson envisioned the spread of the United States to the Pacific. Washington began his military career displacing Indians and claiming personal title to their lands; Jefferson purchased Louisiana though he thought had no constitutional authority to execute it.
I’ve biked western parts of the route Lewis and Clark took from St. Louis to Portland. Other than traversing a few crossroads in my new home state, I’ve not traveled the Oregon Trail, a wagon route established from points on the east side of the Missouri, primarily Independence, now a suburb of Kansas City, to Oregon City, at the fall line of the Willamette, a few miles upstream from my neighborhood. Tomorrow I leave home to drive it, in reverse, a couple hundred miles a day, pausing at undetermined waysides to sleep.
Oregon settlement got underway in 1840, about the time wearing beaver pelts went out of fashion in London. Emigrants, guided by out-of-work fur trappers, stretched the boundary of White America. Their goal was the fertile Willamette Valley (which feeds our household now); its settlement, spontaneous and over time encouraged by federal action, helped convince Britain to retreat from Fort Vancouver (across the Columbia from the mouth of the Willamette) and agree to a U.S. border at the 49th parallel.
Legal settlement in Oregon followed the township system Jefferson helped devise, codified in 1785 under the Articles of Confederation. A township is a six-mile square, divided into 36 sections of one square mile, or 640 acres. In the Oregon Territory, the x and y axes meet at the Willamette Stone, a marker on a mountain west of what is now downtown Portland. After White settlement of Oregon began, the congressional Donation Land Act granted 320 acres of designated areas to unmarried White males and twice that to married couples arriving in the Territory before December 1850. Contemplating that stone, surrounded by forest, is a weird experience. Three thousand miles to the east and decades before, the government decreed that this land could be expropriated in arbitrary squares, regardless of its contemporary occupants, regardless of topography. I try to imagine how a tribal member conceived of “owning” a section.
To clarify what kind of settlement Oregon’s provisional government had in mind, in 1844 it passed its first Black exclusion law, requiring the public whipping of any Black person who sought to reside in the territory. The territorial constitution, approved by voters in 1857, banned both slavery and new Black residents, and made it illegal for Blacks to vote, own real estate, make contracts, or use the legal system. The argument against slavery, articulated by Hinton Rowan Helper in his 1857 tract, The Impending Crisis of the South, was that it hurt the economic prospects of non-slaveholding Whites. Oregon was admitted as a “free” state in 1859. (This is the context for the “Proud Boys,” descendants of the settlers who designed Oregon as a White enclave, in their clash with progressive Portland.)
The Great Migration also set the pattern for the Indian Wars that climaxed with the surrender of Nez Perce Chief Joseph in 1877. Overlanders demanded military protection; many assumed the Tribes had no rights to be respected. Skirmishes between Whites and Indians escalated under a string of army commanders, leading to massacres on both sides. U.S. Army assaults accelerated with the discovery of gold in Montana in 1863; Lincoln wanted that gold to finance the war.
The 1849 gold rush made California the destination for emigrant waves, one of the most transformative developments of the 19th century. Overall, by 1860, about a quarter-million people (of an 1840 population of 17 million) had traveled the trail that fanned to Oregon City (farmers), Sacramento (fortune seekers) and Salt Lake City (Mormons). After the continental railroad was completed in 1869, wagon travel slowed to a trickle. But ruts are still visible along the route, or so I read. I’m about to find out.
It’s not the far side of the moon, but my mind is focused on the challenges the season will pose. Daylight is shrinking, and the wobbling Arctic jet stream has deposited snow on my route. An eastern Idaho Forest Service ranger, working at 6000 feet, told me four inches had fallen on a campground I have in mind. With experience in being snowbound in Oregon mountains, I’m taking my bike and making room for contingencies. The map is the idea.
Text of my letter published in the August 30 Tax Notes Federal, a policy journal that covers Congress. (I was a congressional correspondent and later news editor in the 1990s.)
Portland, Oregon, is a continent away from the backroom deals of Congress, but it’s the hometown of Senate Finance Committee Chair Ron Wyden. Obscure lobbying campaigns can connect two distant cities; to understand how and why Congress sustains special interests, one might connect the dots in between. Consider this example.
Section 1031 (actually its predecessor in intent) was added to the tax code in 1921 to allow deferral of tax on capital gains from “like kind” exchanges of investments until final disposition of the asset. Congress, regulators and the courts have narrowed and widened it into a tax dodge around which has grown a multi-billion-dollar industry of real estate executives and investors. It costs taxpayers about $8.5 billion annually, according to the Joint Committee on Taxation (JCX-23-20).
The August 5 print issue of Portland Business Journal includes a column by two real estate executives. The piece, “Danger lurks in Biden plan,” criticizes the Treasury “Green Book” proposal to limit the aggregate deferral of capital gains tax on 1031 transactions to $1 million annually for joint filers ($500,000 for singles). It would save about $1.9 billion in fiscal 2023, according to Treasury, whose 1031-related estimates tend to be lower than those of the JCT, which has not reviewed the Biden proposal.
The authors, Bill Brown and Dan Wagner, imply that 1031 helps Black Americans build wealth and invest in Black communities—a bonus point for pamphleteers in our time. The weekly tabloid illustrated the column with a half-page photo of a Black man in a hardhat, dress shirt and tie. “[T]he Black American community has increased its share of the commercial real estate investment market through the prudent use of 1031 like-kind exchanges, making a critical reinvestment in their communities while building personal wealth,” they assert without evidence.
This is a favored trope of lobbyists, who argue that Enterprise Zones, Opportunity Zones, the New Markets credit and even the carried interest loophole revive minority neighborhoods. Only by granting capital gains treatment to (mostly White) investors will Blacks get a taste of the good life.
The article continues, “A cap on 1031 exchanges right now—not just at $500,000 but at any amount—would severely restrict the ability and willingness to reinvest in commercial real estate and redevelop properties at a time in our nation’s economy when eager, courageous, and committed investors are needed more than ever.”
Trickle-down tax policy. More than three-quarters of capital gains benefits go to taxpayers with seven-figure incomes. The equities markets are awash in investors.
“Section 1031 has been used to provide affordable multifamily housing in working class communities, reimagine commercial shopping centers, and allow growing businesses to expand their space across Portland.” The authors note an industry-funded study by a Big Four accounting firm that highlighted the virtues of 1031. Ernst & Young estimated that repeal of 1031 would cost the economy $8.1 billion in output.
That’s about the same as the government’s deficit-financed tax expenditure and less than 0.04 percent of GDP. Perhaps the Treasury secretary would get a bigger bang for the buck by handing out Benjamins at the Boys and Girls Club? Consumer spending drives the economy, not investor tax savings.
“It is clear Section 1031 is important to our region’s economy and generates significant tax revenue—much of which would be lost with a cap or change to Section 1031.”
Pray tell: How does tax deferral generate tax revenue? It’s arguable that 1031 drains investment from non-tax-favored alternatives. Put another way, 1031 encourages tax-favored distortions that misallocate capital. If deals pencil out only because of tax breaks, then we should be skeptical of them. We needn’t see the dots, but let’s look anyway.
Dots 1A are the authors.
Dan Wagner is identified in the Business Journal as senior vice president of government relations for the Inland Real Estate Group of Companies. Based in suburban Chicago, Inland is engaged in finance, real estate and other businesses. In March it issued a press release announcing that it had joined the Real Estate Roundtable’s 1031 coalition.
William E. (Bill) Brown is identified as co-founder of Springhill Real Estate Partners and former president of the National Association of Realtors. He’s in suburban Oakland; Springhill’s website indicates Brown has personal investments in Portland properties.
So a couple of wheeler-dealers get ink to defend a tax loophole. It’s not shocking that a local business paper—Dot 2—would publish their “opinion” extolling the value of a federal (and state) tax break to the local economy. After all, the authors are potential or actual advertisers and the readers their potential or actual clients.
Wagner and Brown note their association with the Federation of Exchange Accommodators, a special breed of real estate executive—Dot 3A. FEA’s web address is the IRC section on which its prosperity rests: 1031.org. Naturally FEA has a PAC—Dot 4A. Wagner has contributed $8,500 to it in 2020-21, according to Federal Election Commission filings. (Brown’s name is not listed; his campaign contributions have gone to other entities.)
Dot 3B is the aforementioned Real Estate Roundtable, whose task is to generate congressional support for the industry, like an August 6 press release contending the importance of 1031 to small farms and businesses (another trope) and trumpeting a letter opposing the Biden proposal signed by 88 House Republicans. A few weeks before Inland announced it had joined RER, Wagner contributed to its PAC—Dot 4B—which is much bigger than FEA’s. Twelve other trade groups funded the Ernst & Young study (Dot 5A); tag them as Dots 3 and 4, C through N. One of them, Brown’s National Association of Realtors, dispensed $11 million to candidates in the 2019-2020 cycle.
FEA retains Williams & Jensen, a D.C. lobbying firm, to represent its interests—Dot 5B. FEA currently pays W&J $90,000 per quarter to monitor section 1031. In the fourth quarter of 2017, when Congress was writing what’s popularly known as the Trump tax law, FEA paid the firm $240,000 to defend 1031 (a provision from which Donald Trump personally benefits). In that law, Congress limited 1031 exchanges to real property, shaving the cost by $2.9 billion in 2023, according to JCT (JCS-1-18).
Among FEA’s PAC contributors are two Portland residents—Dots 1B. The Beutler Exchange Group LLC was passed by William Beutler, now retired, to his daughter Toija. They have contributed $17,500 to the PAC since 2017, including $10,000 this year.
A new recipient of the PAC is Ron Wyden—Dot 6A; he’s received $4,000 in 2021, since Democrats took Senate control. Wyden’s House counterpart, Richard Neal (D-MA)—Dot 6B—has received $30,000 since he became chair of the Ways and Means Committee in 2019.
On the top of Beutler’s web page is a banner:In a unanimous non-binding voice vote the Senate votes to preserve 1031! To view the vote, click here.The link is to the C-SPAN feed of the two minutes of consideration on August 10 of Senator John Kennedy’s amendment to the 2022 budget resolution—Dot 7. In it, Kennedy (R-LA) claims his amendment would “prohibit any changes to the treatment of like-kind exchanges.”
That’s a stretch. Students of the Senate budget reconciliation process and the exercise known as “vote-a-rama” (Kennedy’s amendment was the last taken up in 15 hours of “debate”) understand that these non-binding resolutions prohibit nothing and have the approximate effect of a press release. The fate of 1031 will be decided in Finance and in Ways and Means. (Kennedy is not on the Finance Committee.) Thus we understand why Wagner and Brown, perhaps consulting with Ms. Beutler, targeted a journal read by the Portland business community: to generate pressure on Chairman Wyden to ignore the proposal.
If we return to their column, we might imagine Messieurs Brown and Wagner’s hypothetical Black (and SEC-accredited) investor, a married couple. Flush with home equity, retirement savings and other assets, they seek a tax shelter. Finding an FEA practitioner, they put $300,000 into a real estate investment pool. Some years later the value has grown to $1.3 million; the couple enters a like-kind investment. Under the Biden proposal, they would still defer all tax. And using other provisions of the code, they could shield the gain from tax until death, leaving it to their children, who would receive stepped-up basis. No one ever pays tax on the gain.
Moving from the hypothetical to the real: Portland Business Journalreported August 19 that two downtown buildings are on the market, both associated with the families that sold the Portland-based McCormick & Schmick’s restaurant chain in 2012. The sellers’ agent, Justin Poor, told the paper, “The generational asset has not been on (the) market in nearly 50 years. Timing makes sense for both families to sell.” The report concluded, “Poor confirmed plans for what’s called a 1031 exchange, essentially a way for real estate investors to sell one building and then put the money into another, similar one while deferring capital gains taxes.”
How the proposed cap on tax-deferred sales would, as Brown and Wagner contend, “severely restrict the ability and willingness to reinvest in commercial real estate and redevelop properties” is unclear. Nor is it clear what makes real estate profits so special that they deserve a section like 1031.
But there you have it. A century ago Congress bought an economic sprinkler. It became a canal for federal largess thanks to a constellation of players: tax lawyers, their front groups on K Street, cheerleading local papers, our pay-to-play system of campaign finance, and cowed (or all-in) members of Congress.
We have been remiss in our correspondence with you. As our steering committee spent the legislative session plowing through bills and testifying on 41 of them (some more than once), we didn’t set aside time to explain. Then when the five-month session ended in June, we tended to our parched gardens. At this late date, we report back to you.
Our legislators sent wrap-ups touting their many successes among their various priorities. We considered 2021 a wasted opportunity to address gaping inequities in Oregon’s tax code. With the federal government shipping hundreds of billions in cash across the country, our reps had no appetite to limit tax giveaways to the wealthy, especially because they know that because of the two-thirds quorum rule, the GOP minority can walk at any time (and they did, repeatedly). The intransigence of the minority and their allies in the business lobby was on display in the revenue committees, where the alleged representatives of corner stores mounted letter-writing campaigns on behalf of their true paymasters. On the other hand, we were able to defeat most bills that would have shoveled millions more in state revenue to the richest Oregonians. Here are some highlights.
Pass-through tax regime – A PARTIAL WIN
Since 2013, most Oregon pass-through business owners (sole proprietors, partnerships, LLCs, S corporations) have paid tax rates about 2 percentage points lower than wage earners. These business owners pay taxes only at the individual, not corporate, level; their profits “pass through.” We presented an analysis demonstrating that the 2% differential (which costs $100 million a year) was too little to change any business owner’s behavior, much less hire one additional employee, and urged repeal of the whole regime.
Senate Finance Committee Chair Ginny Burdick, who announced her plan to resign after the session, worked with Republican-turned-independent Brian Boquist on a compromise that eliminated benefits for pass-throughs with income of more than $5 million but lowered rates for taxpayers below that threshold. (Many Democrats still buy the Reagan myth that lower taxes create jobs.) We supported passage of SB 139 (which saves about $30 million a year) as a step in the right direction. Once wealthy owners no longer benefit, the business lobby’s defense of it may diminish – those groups don’t actually represent the small businesses they claim to. Boquist told his colleagues that any small business they might cite would benefit from the bill, yet most Republicans still voted against it in the wake of opposition from NFIB and Oregon Business and Industry (the state’s biggest business lobby). A similar dynamic characterized House passage.
SALT deduction – A LOSS
After Congress limited the state and local tax deduction to $10,000 in 2018, states began trying work-arounds. The Trump administration’s Treasury Department gave the thumbs-up to a New Jersey law that created an alternate regime for pass-throughs, effectively allowing their owners (but no one else) to use an unlimited deduction of state taxes on their business income. When Chair Burdick brought a copycat provision to committee, we testified that it could be manipulated by sophisticated taxpayers in a way that would cost Oregon revenue. (The provision was designed to be revenue-neutral for the state while giving its beneficiaries federal deductions.) The Finance Committee revised the bill to close a loophole that had concerned us – leading a tax accountant for corporations to complain about the revision and demonstrating that we had succeeded in limiting the damage. We felt hamstrung in lobbying against the bill because it was packaged with the pass-through reform, so we did little more than testify against it. After the bill passed the Senate, we testified in the House that it was a textbook example of how the legislature uses tax law to enrich the already wealthy, though in this case we were giving them a federal tax break, not a state one. House Revenue Chair Nancy Nathanson, often an ally, championed the bill on the last day of the session, and only seven members (including Speaker Tina Kotek) voted against it.
PPP/CARES Act benefits – A LOSS
In spring 2020, we alerted the legislature to a potential state revenue loss from the Covid-inspired federal CARES Act, which allowed certain taxpayers to carry back losses supposedly resulting from the COVID recession to offset tax liabilities from as long ago as 2013. Nathanson enlisted us in the effort to move a bill disconnecting Oregon from the federal provisions, as seven other states eventually did. By fall, both Speaker Kotek and Senate President Peter Courtney had endorsed the proposal, and Governor Brown put it in her budget in January. But the tax committees never moved a bill to disconnect.
Separately, Congress, led by our own Senator Wyden, passed a provision in the December budget that similarly opened Oregon to hundreds of millions in potential revenue losses. The provision allows businesses that received PPP loans that were later forgiven from repayment to exclude those amounts from income (forgiven loans generally are taxable income) – and to deduct expenses to which they applied the proceeds. We immediately alerted tax leaders of the revenue implications of this “double-dip” and that it benefited primarily wealthy businesses untouched by the Covid downturn. It might be fine for the federal government to give away that tax revenue, it can print money; but for Oregon the provision represents a huge liability. We lobbied and testified on a bill to require taxpayers to include the forgiven loans as income for state purposes, but the tax committees did not move it.
Timber Taxes – A LOSS
The June 2020 investigative reporting on big timber’s success in avoiding state taxes inspired us to research and build a network on timber issues. Some hate that a major industry pays little tax; some are angered by industry disregard for watersheds and drinking water; others are outraged that the tax-supported Oregon Forest Research Institute has become an industry organ. OFRI claims that the state’s forest practices are great, though the federal government has withheld millions in funding because our laws don’t meet federal standards.
To build on the momentum, TFO sponsored eight Zoom workshops, specific to areas across the state. We talked with county commissioners and legislators and worked to shape a bill. We testified at several hearings and lobbied bill sponsors – all to little avail. No new timber tax, and a bill to reform OFRI died in the Senate. Instead, the legislature shifted funding timber-related expenditures (firefighting, the Department of Forestry and OSU research) from a harvest tax to the general fund. Some legislators – and Governor Brown – insist a bill will be back in 2022.
Mortgage Interest Deduction – A LOSS
For years Rep. Alissa Keny-Guyer pushed the legislature to deny the MID to high-income homeowners for second homes and use the saved revenue for housing. Owners of second homes enjoy the MID while workers in vacation areas can’t afford rent. Keny-Guyer retired last year, and her successor, Khahn Pham, took up the cause. House Revenue held a hearing that drew a coalition of tax reform, housing and local-government witnesses, all testifying to Oregon’s housing shortage and the gross inequity of giving a tax break for debt on second homes. (Two of our steering members live in Bend and Florence, where many of their neighbors’ homes stand vacant much of the year.) This is a multi-year effort, and we are working with our allies to push it to the top of the agenda.
Taxation of federal stimulus checks – A WIN
We felt lonely – and proud – to be the only witness testifying against a bill that would have exempted the Covid checks many households received from Oregon income tax (our testimony got us coverage on TV news). It sounds unfair: The government is giving us this money because of an economic crisis; we shouldn’t be taxed on it! But that’s counter to equitable principles: add up your income and pay the appropriate rate on that amount. Millions of upper-middle-class people unaffected by the Covid recession got checks. The government taxes unemployment payments, but proponents argued they shouldn’t be taxed on payments for doing nothing? Besides, the Department of Revenue said it would be impractical to provide refunds of tax due (it could provide credits on taxpayers’ 2022 liabilities). The bill died.
Landlord tax credit – A WIN
Senator Betsy Johnson, co-chair of the powerful Ways and Means Committee, drew wide support for a bill that would create a tax credit for landlords who couldn’t collect rent from Covid-affected tenants. Rare is the senator who wants to cross the colleague whose committee controls most spending. We testified twice, pointing out that the legislature in December created a payment program for those same landlords. Johnson argued that the program provided only partial reimbursement for lost rent; we pointed out that asking a second state agency to administer another new program was inefficient and that the tax credit, payable over five years, wouldn’t make landlords whole either. The bill passed out of the Housing Committee and quietly died in Finance. We gave it a lovely memorial service.
Tax Credits – LOSSES
Much of our energy was devoted to advocating the natural death of slews of tax credits, pet provisions that legislators suppose will advance some favored economic activity. We think they are mostly tax giveaways that have no effect on behavior. There’s a tax credit for Hollywood film production, popular in many states. Oregon allows taxpayers to redirect their payments to favored charities, a shift that allows individuals to determine how the state spends revenue. A few of these expenditures died for lack of interest, but the trend is in the wrong direction, partly because the revenue committees like to spend money as much as legislators on other committees.
Attacks on the Commercial Activities Tax – MIXED
The CAT was intended to fund K-12. Only two years old, it is subject to repeated, far-ranging efforts to exempt this or that activity or industry. We helped fight off these exemptions, though one we supported also died: exempting pharmaceuticals because of the way prescription drugs are priced by their many intermediaries. We agreed that independent pharmacies in rural areas may be threatened by the CAT because of their narrow margins.
Beer and Wine – A LOSS
No progress on Oregon’s tiny taxes, among the lowest in the country. It’s easier to kill bills than pass them. Measures elsewhere gave more money for treatment (though Oregon has way fewer treatment options than most states). But with the beer tax at 1 cent a bottle, any meaningful increase will be characterized as exorbitant.
Our critical role
Some of our issues draw wide attention, but often we are the sole witnesses providing public testimony on the other side of a bill. In a recent exchange, the head of the nonpartisan technical tax staff wrote us about our testimony on the SALT deduction bill. “I don’t know that it’s obvious from outside the building, but public feedback on proposed policies is extremely helpful. I always encourage as much public testimony as possible. Thanks for contributing.”