There can be no doubt that taxation without proper representation set the stage for the Declaration of Independence and the American Revolutionary War. Britain’s debt skyrocketed in the decade before the war and King George III made matters worse by wrongly thinking a heavier tax burden was the solution.
By 1763, taxes were intolerable in Britain and still rising. Previous advisors to the king avoided the issue of taxing the colonies because it was unpopular on both sides of the Atlantic. But during the next four years, the British Parliament began passing laws to raise money through taxing the American colonists. These laws caused severe financial hardships in the colonies and began to engender anger toward the British government. Four acts instituted during this period can be seen as the prelude to the inevitable revolt that would follow.
The Sugar Act (1764)
The Sugar Act placed a tax on molasses, sugar, and other products imported into the American colonies from places outside the British Empire. A similar law, called the Molasses Act, had been passed in 1733, but the people had not obeyed for two reasons:
- The taxes were too high.
- The British government did not try very hard to enforce it.
Any time a government does not enforce a law, people start ignoring it. In this case, the colonists openly turned to smuggling—bringing in sugar and molasses secretly to avoid paying the tax. By not enforcing its laws, Britain allowed the colonists to get used to running their own affairs.
The British Parliament became determined to enforce the new sugar act of 1764. When the British suddenly stiffened enforcement of the law, the colonists resented it. The British used naval patrols and royal inspectors to search colonial warehouses and even private residences, thus angering the colonists further.
The British even offered to share the taxes with any citizen who reported friends or neighbors who were smuggling. If the person was found guilty, the police who arrested the smuggler and the judge who found him guilty could also receive a large reward. The result of this was difficulty for someone accused of smuggling to get a fair trial. Many colonists became deeply angered by this unfair system.
The Currency Act (1764)
Not long after passage of the Sugar Act, Parliament enacted another new law—a law which would plunge the colonies into financial depression. Businesses had been expanding quickly in the colonies. Small fortunes were already being made as the colonists begin to develop the bountiful eastern half of North America. Shipbuilding was already a big industry. Colonial shipyards were building one-third of all the merchant vessels sailing under the British flag.
To make business easier to pursue, the colonies created their own paper money. It was called colonial scrip. It was money issued by colonial governments for the benefit of the people in general. British bankers didn’t like this. With the colonies printing their own money, America’s economy appeared to be getting out of the control of Britain.
To prevent this, the British Parliament passed the Currency Act of 1764. This made colonial scrip illegal and forced the colonists to exchange it for British money, issued by the Bank of England. To make matters worse, the British only gave the colonists one Bank of England note for every two notes of colonial scrip. As Benjamin Franklin put it, “the circulating medium of exchange was thus reduced by half.”
Suddenly, all-American products for half price! The Americans had to pay twice the price for all the British products they bought. Cutting the money supply to the colonies in half caused tremendous financial problems. Concerning the Act, Franklin wrote:
“In one year the conditions were so reversed that the era of prosperity ended, and a depression set in, to such an extent on the streets of the Colonies were filled with the unemployed.”
In fact, Franklin believed that the anger caused by this depression was one of the major factors for the Revolutionary War.
The Quartering Act (1765)
The following year the British Parliament passed even more inflammatory laws. The first of these, the Quartering Act, made the colonies provide barracks and supplies to house or quarter British troops stationed in America. Most Americans believed that the British Army was present just to keep the Americans in line, so the Quartering Act was deeply resented by many.
The Stamp Act (1765)
For years, the British government had taxed her citizens for all kinds of official paperwork. In 1765, Parliament passed similar laws in America which taxed licenses, college diplomas, playing cards, advertisements, newspapers, and legal documents such as deeds to lands or mortgages on property. The Act derived its name from the stamp which was put on the documents or materials to show the tax had been paid.
Americans erupted in anger. Before the law could even take effect, resolutions condemning the Stamp Act poured into Great Britain. Americans had no say in the fairness of this new form of taxation. They had no votes in the British Parliament. All across the American colonies, the new cry “taxation without representation” was heard.
In the Virginia House of Burgesses, 29-year-old Patrick Henry denounced the Stamp Act in fiery terms. Suggesting that the act would eventually force the colonies into revolt and be the downfall of King George III, Henry urged fellow legislators not to turn back: “If this be treason, make the most of it.”
When viewed in light of British history, Patrick Henry’s outrage doesn’t seem unreasonable. He was merely trying to do what his forefathers had been doing for hundreds of years – give the power to tax to an elected assembly of the people to create a more democratic form of government.
As a result of Henry’s famous speech, the Virginia House of Burgesses declared the Stamp Act to be unjust and even illegal. They also passed resolutions that Parliament had no authority to tax Virginians. Throughout the colonies the rallying cry became, “no taxation without representation.”
Parallels to Today
Thank goodness that we fought our revolutionary war and rid ourselves of the “tax and spend” Parliament and king, right? Unfortunately, the more things change, the more they stay the same. The following taxes weren’t even around 100 years ago, but like a crack addict, once the power to tax is indulged, the government’s appetite is insatiable.
- Accounts Receivable Tax
- Building Permit Tax
- Capital Gains Tax
- CDL license Tax
- Cigarette Tax
- Corporate Income Tax
- Court Fines (indirect taxes)
- Dog License Tax
- Federal Income Tax
- Federal Unemployment Tax (FUTA)
- Fishing License Tax
- Food License Tax
- Fuel permit tax
- Gasoline Tax
- Hunting License Tax
- Inheritance Tax Interest expense (tax on the money)
- Inventory tax IRS Interest Charges (tax on top of tax)
- IRS Penalties (tax on top of tax)
- Liquor Tax
- Local Income Tax
- Luxury Taxes
- Marriage License Tax
- Medicare Tax
- Property Tax
- Real Estate Tax
- Septic Permit Tax
- Service Charge Taxes
- Social Security Tax
- Road Usage Taxes (Truckers)
- Sales Taxes
- Recreational Vehicle Tax
- Road Toll Booth Taxes
- School Tax
- State Income Tax
- State Unemployment Tax (SUTA)
- Telephone federal excise tax
- Telephone federal universal service fee tax
- Telephone federal, state, and local surcharge taxes
- Telephone minimum usage surcharge tax
- Telephone recurring and non-recurring charges tax
- Telephone state and local tax
- Telephone usage charge tax
- Toll Bridge Taxes
- Toll Tunnel Taxes
- Traffic Fines (indirect taxation)
- Trailer registration tax
- Utility Taxes
- Vehicle License Registration Tax
- Vehicle Sales Tax
- Watercraft registration Tax
- Well Permit Tax
- Workers Compensation Tax
I don’t know about you, but I feel taxed enough already.