A Lesson in Tax Law, Chapter 8: Taxation and The Boston Tea Party

W. Marc Gilfillan, CPA, NC, individual and business CPA and Tax expert, shares about the history of taxes…

Ah…. now we have an event in history obviously concerning abusive taxation. Was the Boston Tea Party a protest concerning the British taxation on tea, as we were all taught? No, not one bit. The colonies had already been boycotting English tea for 5 years prior to the Boston Tea Party! Instead, they smuggled in Dutch tea and were doing quite well. There was tea for all and no British tea tax paid. Naturally, the British did not like this boycott. So, the British forgot the duties at home. The Parliament allowed British tea merchants to avoid the import tax of shipping the tea to England and then pass the savings along to the colonies when they shipped the tea over and thereby sold British tea at a price that was lower than the smuggled Dutch tea. 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!

But what people would sell this British tea?

They sold it with the loyal British merchants located in the colonies. But will the colonists take the cheaper British tea with an included tax? Yes. They bought so much that what ended up happening was loyal British merchants were getting all the business and the taxes were still being given to England. However, the colonists did not care about the tax that much; they ended up receiving more inexpensive tea. BUT, the non-British MERCHANTS didn’t enjoy this gig. The British merchants, gaining the assistance of England, had essentially established a monopoly on tea sales. The native merchants feared it would only be a matter of time before many British enterprises would be created with an identical mechanism and they would be forced out of business. Go here if you want help with a modern-day Tax Return in Raleigh, NC.

So, a collection of MERCHANTS who appeared to be Indians, boarded a ship loaded with British tea and dumped it into the water. Was this a shining peak in American tax protest? Not at all. The Boston Tea Party was viewed as the senseless desecration of private property at a time when private property was highly regarded. The Boston Tea Party was extremely looked down upon and did not sit well with the colonists. Ben Franklin was shocked and demanded that full restitution would be paid immediately to the owners of the tea. However, it escalated into war.

However, the colonies would soon find that masses of warships, battalions of soldiers, and cannons were a lot scarier than a couple tax collectors. The funny thing is, America won the war, primarily because England realized it was too expensive to fund war so far from home. BUT after the war, America had astounding debts and taxes, and even with representation they were enormous.

Keep an eye out for W. Marc Gilfillan’s next chapter in his History of Taxes series: Taxes and Slavery and the Civil War.

http://www.marccpa.com/

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