A Lesson in Tax Practices: Taxes and America’s 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 solidly based in taxation. Taxation not only caused it, but helped unify the disorganized and disagreeing colonies. However, maybe not exactly the way you think. 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 taxation on the colonies were neither unfair nor oppressive. Actually, Americans had a good life: we had the help of Britain, our land was fertile, businesses thrived, and jobs were widely available. Europe’s social castes did not enchain the citizens and our sons were not forced to battle in wars in far-off places… we had it good. So why? Well, there were many missteps and misstatements by each side.
“Taxation without representation” was indeed an issue. The problem was, nobody knew quite the solution to this problem (following the American revolution, many colonies such as Canada and Australia found more productive solutions). However, at this point in history there was no agreement by the British parliament or American leaders on what should happen to dissolve “taxation without representation”. Ben Franklin, unknowingly I presume, made the issue worse. 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, he meant the stamp tax and any other taxes that were paid on transactions within the colonies themselves. External taxes, by the colonists’ definition, were taxes such as import taxes that were placed upon transactions that only in part occurred in the colonies. They believed import taxes were external to the colonies. Yes, if you’re confused about this, you ought to be. It makes almost no sense. No one understood the connection with import/export taxes and the final prices paid for the products. In other words, import/export taxes worked against 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 enacted new tariffs, import and export taxes. Then, Americans decided they made a mistake. They saw the flaw of their reasoning… but it was too late and the situation worsened.
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