The History of Tax Practices, Section 7: Tax and America’s Revolution
December 20th, 2009
W. Marc Gilfillan, CPA, NC, individual and business CPA and Tax expert, shares about the history of taxes…
There has been no modern revolution that was more solidly based in taxation. Taxation not only caused it, but helped unify the unorganized and disagreeing colonies. However, maybe not exactly the way you might imagine. 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 unfair nor oppressing on the people. In fact, Americans had a good life: we had the protection of Britain, the land was fertile, business was good, and there were jobs for everyone. Europe’s social castes did not enchain us and our sons were not forced to battle 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 a problem. The problem was, nobody knew quite what to do about this problem (after the American revolution, other colonies such as Canada and Australia were able to find more productive solutions). But at the point in history there wasn’t agreement by the British parliament or American leaders on what should happen to dissolve “taxation without representation”. Ben Franklin, unknowingly I presume, complicated the issue. He took a boat 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 stamp tax and other taxes that were paid on transactions within the colonies themselves. External taxes, according to colonists’ definition, were taxes such as import taxes that were placed upon transactions that only partially took place in the colonies. The colonists believed import taxes were external to the colonies. Yes, if you are puzzled about this, you should be. It makes little sense. No one caught on to the connection between import/export taxes and the ultimate prices paid for the products. In other words, import/export taxes affected the “other guy” so they were OK.
OK, said the British parliament. 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 folly of their logic… 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/
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