The Lesson in Tax Law, Section 7: Tax and The American Revolution
by Guest Author on December 7, 2009
in General
W. Marc Gilfillan, CPA, NC, individual and business CPA and Tax expert, shares about the history of taxes…
No other revolution that was more solidly rooted in taxation. Tax issues didn’t just cause it, but helped unify the disorganized and disagreeing colonies. However, probably not exactly the way you might imagine. If you’re feeling the pressure with today’s taxes, call a CPA for Tax Preparation in Raleigh, NC for all your tax-related needs!
First, the British taxes on the colonies were neither not fair nor oppressing on the people. Actually, Americans had a good life: we had the protection of the British empire, the land was fertile, businesses thrived, and there were jobs for everyone. Europe’s social castes didn’t limit the citizens and our sons were not forced to fight in wars in far-off places… we had it good. So what happened? Well, some missteps and misstatements by both sides. Go here if you want help with a modern-day Tax Return in Raleigh, NC.
“Taxation without representation” was indeed an issue. The problem was, nobody quite knew what to do about this problem (following the American revolution, many colonies such as Canada and Australia were able to find more productive solutions). However, at this time there wasn’t agreement by the British parliament or American leaders on what could be done to avoid “taxation without representation”. Ben Franklin, unknowingly I presume, complicated the issue. He went over to England as our liaison and told the British that internal taxes were unacceptable but external taxes were OK.
By internal taxes, Franklin meant the paper tax and any other taxes that were paid on transactions within the colonies themselves. External taxes, according to colonists’ definition, were those like import taxes that were placed upon transactions that only in part occurred in the colonies. The colonists thought import taxes were external to the colonies. Yes, if you are puzzled about this, you ought to be. It makes almost no sense. Apparently no one understood the connection between import/export taxes and the ultimate prices paid for the goods and services. In other words, import/export taxes worked against the “other guy” so they were OK.
The British parliament complied. if that is what you want we’ll play along and give you whatever it takes to make you happy. So, the British created new tariffs, import and export taxes. Then, Americans decided they made a mistake. They saw the folly of their reasoning… however, it was too late and the issue worsened.
Keep an eye out for W. Marc Gilfillan’s next chapter in his History of Taxes series: Taxes and the Boston Tea Party.
http://www.marccpa.com/
