A History of Tax Practices, Chapter 7: Taxation and The American Revolution
W. Marc Gilfillan, CPA, NC, individual and business CPA and Tax expert, shares about the history of taxes…
There has been no other revolution that was more deeply rooted in tax problems. Taxation not only caused it, but assisted in providing unity for the disorganized and disagreeing colonies. However, probably not exactly 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 unfair nor oppressing on the people. In fact, Americans had a good life: we had the protection of the British empire, the land was rich, business was good, and jobs were widely available. Europe’s social structures did not limit the citizens and our sons were not conscripted to fight in wars in far-off lands… we had the good life. So what happened? Well, some missteps and misstatements by each side. 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 knew quite the solution to this problem (after the American revolution, other colonies such as Canada and Australia found adequately achievable solutions). But at the point in history there was no agreement by the British parliament or American leaders on what could be done to dissolve “taxation without representation”. Ben Franklin, probably without his own knowledge I presume, made the issue worse. He went over to England as our spokesman and said that internal taxes were bad but external taxes were OK.
By internal taxes, Franklin meant the paper tax and any other taxes that were paid on transactions in the actual colonies themselves. External taxes, by the colonists’ definition, were those like import taxes that were on transactions that only partially occurred in the colonies. The colonists believed import taxes were external to the colonies. Yes, if you’re confused about this, you should be. It makes almost no sense. No one understood the connection with 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 desire 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/