War demands emergency revenue, and especially was this true of the Civil War. When Mississippi formally renounced her allegiance to the Union in 1861, the Constitutional Convention which passed the Ordinance of Secession supplemented this by an "Ordinance to Raise Means for the Defence of the State."[72] This ordinance provided for the collection from each taxpayer of an additional Special State tax of 50% on the regular State tax, and also a tax from every inhabitant of 3-10 per cent. upon all money owned or controlled by such inhabitant—the moneys so collected to constitute a Military Fund.
In 1863 it was further enacted that a special tax of 50 per cent. on the regular State tax should be levied, to be known as the Military Relief Tax, the proceeds to be used for the relief of the destitute families of Confederate soldiers.[73] In 1865, in order the better to provide for the families of the soldiers a direct tax in kind of 2 per cent, was levied on the gross amount of all corn, wheat and bacon, in excess of 100 bushels, 25 bushels and 100 pounds respectively; on the tolls from all grain mills in the State, on the gross profits of leather, whether manufactured for sale or received on shares as commission by tanneries; and on all woolen and cotton factories and fabrics manufactured for sale.[74]
For the benefit of the County Indigent Fund, the Boards of Police of the several counties were empowered to levy a tax in kind of ½ per cent. on all corn, wheat and bacon, grown and produced in the State.[75]
The exigencies of war and the depreciation of the Confederate treasury notes, in which taxes were paid, necessitated not only the levy of special taxes, but an increase in the number and rates of the specific objects taxed. Notable among the additions to the regular tax schedule were taxes of five cents a pound on all seed cotton over one bale of 500 pounds of lint, raised by a single hand; of 2 per cent. on the gross profits of iron foundries, machine shops, dealers and speculators[76] in grain, provisions, etc.; of 50 per cent. on the wages of mechanics in excess of 75 per cent. profit above the actual cost of labor and material; of twenty cents on every hundred dollars of railroad stock which paid 3 per cent. per annum. Heretofore the State had encouraged railroad enterprise by exemption from taxation and before the war had even gone so far as to levy special railroad taxes in the several counties in payment of stock subscriptions to these enterprises. But financial expediency dictated that premiums for industrial progress be withdraw and that all the State's fiscal energy be conserved for the business of war. Emergency taxation was supplemented as a fiscal device by depreciated cotton money, Confederate currency and Mississippi Treasury notes, and this extreme economic tension was only relaxed after the last troops of the Confederacy had surrendered.
Upon the downfall of the Confederacy in 1865, the Constitutional Convention assembled by Gov. Sharkey organized Mississippi as a regular State government. The financial problem confronting this Post-Confederate government was as hard a Gordian knot to cut as that which confronted the Confederacy itself. Land was worthless as an object of taxation, because it had no value. Industries were paralyzed, and needed bonuses rather than increased burdens. The debt contracted during the war was not repudiated, and there was a State government to support. How was the difficulty to be solved?
The Constitutional Convention of 1865 and the State legislatures of 1865, 1866 and 1867 acted in a sensible and heroic way in dealing with the situation. A direct tax of $1 per bale was levied on all cotton brought to market and sold; an inheritance tax of 1 per cent. of the gross amount of all collateral inheritances; a tax of 3-10 per cent. upon the amount of the annual rents and tenements. Privilege licenses were exacted from the larger corporations best able to bear them, a notable instance of this being the license of $2000 per annum imposed upon express companies.[77] This selection of taxable objects proved most fortunate, the cotton tax alone yielding sufficient revenue to support the whole state administration. The commonwealth's indebtedness was scaled, and Mississippi was rising Phoenix-like from the ashes of financial despondency.
But in 1867 there was fastened upon the State the reign of "Reconstruction and Radicalism," which meant untold retrogression in fiscal policy. This reign of mongrelism, ignorance and depravity was formally ushered in by a motley assemblage known as "the black and tan convention," so called from the negroes and carpet-baggers composing it. The special taxes levied to cover the profligacy and extravagance of this convention, whose expenses for a period of less than five months aggregated nearly a quarter of a million of dollars, were prophetic of the future. Cotton, cotton gins, grist and saw mills, ferry and wharf boats, grocery, drug and provision stores, banks, hotels, photograph galleries, railroad and steamboat companies—all were impaled on reconstruction's fork. Even the freedom of the press was not respected, sums ranging from $20 to $50 being levied on each daily, tri-weekly and weekly newspaper published in the State. The plunderers modestly concluded their infamous schedule with the provision "that a special tax of 50 per cent. on the State tax be levied in addition to the State tax now assessed upon real and personal property."[78]
The Constitution framed by the "black and tan convention" was rejected and the Conservative administrations of Governors Alcorn and Powers, both property owners and taxpayers in the State, had the effect of tempering fiscal excesses. However, this temperance was only temporary and, as compared with the former period, might be called rank intoxication. In 1869 the State levy was only 1 mill on the dollar; in 1870, 5 mills; in 1871, 4 mills; in 1872, 8½ mills; and in 1873, 12½ mills. This was only the State tax. In many counties a county tax of 100 per cent. on the State tax was added, besides a Special tax in some counties to pay the interest on their bonded debt, and a Special tax in the incorporated towns of from 5 to 10 mills on the dollar for town purposes. In this way it happened that the total tax paid by citizens was 2 8-10 per cent. outside the cities, and from 3½ per cent. to 4 per cent. in cities and towns.[79]
With the election and inauguration of Adelbert Ames as Governor in 1874, the spirit of plunder and revenge which animated the aliens and negroes burst forth with a fresh fury. The tax on land was increased to 14 mills, a rate which virtually amounted to confiscation. Cotton was taxed $10 per bale and the proceeds were invested in the Freedman's Savings Bank, a gigantic swindling agency at Washington. The poll was increased from $2 to $6 a head, and the responsibility for the payment of the negroes poll was saddled on his white employer. This farce fiscal comedy reached its climax in the imposition of a 1 per cent. tax on all amounts expended by the citizens of the State in travel.[80] The people simply could not pay these taxes, and over 6,400,000 acres of land were forfeited for nonpayment.