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The History of Taxation Practices, Part Seven: Taxation and The American Revolution
By plrprousers | December 23, 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 tax problems. Tax issues not only caused it, but assisted in providing unity for the unorganized and squabbling colonies. However, maybe not exactly the way you might imagine. 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 not fair nor oppressive. Actually, Americans had it great: we had the help of the British empire, our land was fertile, businesses thrived, and there were jobs for everyone. Europe’s social castes didn’t limit the citizens and our sons were not conscripted to fight in wars in far-off places… we had it good. So why? Well, there were many 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 truly an issue. The problem was, nobody knew quite what to do about it (after the American revolution, other colonies such as Canada and Australia were able to find more achievable solutions). However, at this point in history there wasn’t agreement by the British parliament or American leaders on what should happen to avoid “taxation without representation”. Ben Franklin, unknowingly I presume, complicated the issue. He went over to England as our spokesman and said that internal taxes were bad but external taxes were OK.
By internal taxes, he meant the stamp tax and other taxes that were paid on transactions in the actual colonies themselves. External taxes, according to colonists’ definition, were those like import taxes that were on transactions that only in part occurred within the colonies. The colonists thought import taxes were external to the colonies. Yes, if you are puzzled about this, you ought to be. It makes almost no sense. Apparently no one understood the connection with import/export taxes and the final prices paid for the products. Essentially, import/export taxes affected the “other guy” so they were OK.
OK, said the British parliament. if that’s what you desire we will help 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 reasoning… but it was too late and the issue got worse.
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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