A History of Tax Law, Section Seven: Tax Law and America’s Revolution
W. Marc Gilfillan, CPA, NC, individual and business CPA and Tax expert, shares about the history of taxes…
No modern revolution that was more solidly rooted in tax problems. Tax issues not only caused it, but helped unify the disorganized and squabbling colonies. However, probably not precisely the way you think. If you are 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 oppressive. In fact, Americans had it great: we had the help of Britain, our land was fertile, business was good, and jobs were widely available. Europe’s social structures did not limit us and our sons were not forced to fight in wars in far-off places… we had the good life. So what happened? Well, there were many 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, no one quite knew the solution to it (after the American revolution, other colonies such as Canada and Australia were able to find more productive solutions). However, at this time there was no agreement by the British parliament or American leaders on what should be done to avoid “taxation without representation”. Ben Franklin, probably without his own knowledge I presume, complicated the issue. He went over to England as our spokesman and said that internal taxes were unacceptable but external taxes were OK.
By internal taxes, Franklin meant the stamp tax and any other taxes that were paid on transactions in the actual colonies themselves. External taxes, according to colonists’ definition, were taxes like import taxes that were on transactions that only in part took place in the colonies. They thought import taxes were external to the colonies. Yes, if you’re puzzled about this, you should be. It makes almost no sense. Apparently no one understood the connection with import/export taxes and the final prices paid for the goods and services. Essentially, import/export taxes affected the “other guy” so they were OK.
The British parliament complied. if that’s 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 changed their mind. They saw the flaw of their reasoning… but it was too late and the situation got worse.
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/
