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Think About It: Is Taxation Un-American?

Think About It: Is Taxation Un-American?

Author: Sophia Tutorial
Description:

Distinguish between the concepts of internal and external taxation, and between actual and virtual representation.

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Tutorial

what's covered
This tutorial considers why the American Revolution took place by looking more closely at taxation in the colonies and the debate over the Stamp Act.

  1. Introduction
  2. Colonial Taxation Prior to 1763
  3. The Stamp Act
  4. “Taxation without Representation”
  5. “Virtual Representation”


1. Introduction

The issue of taxation is a centerpiece of modern American politics. When it comes to resistance to taxes, one can draw inspiration — and justification — from the revolutionary generation. Contrary to popular belief, however, the colonists did not fight for independence simply because they opposed some taxes. Merchants, landowners, and other colonists were part of the British mercantilist economy, financially supporting the mother country through payment of customs duties. Moreover, colonists paid taxes levied by their legislatures to support local governance of the colonies.

The taxes imposed by Parliament in the 1760s were a different matter. While some colonists begrudged the financial burden, many others saw measures like the Stamp Act as more significant because they indicated an unequal relationship between British citizens and colonists.


2. Colonial Taxation Prior to 1763

The Navigation Acts (enacted beginning in 1651) were an attempt by Parliament to assert control over the Atlantic economy. They imposed regulations on colonial trade and applied import and export duties on various goods moving through the colonies and overseas. These external taxes and economic regulations enriched England, leaving the colonies to find the revenue necessary to support their local needs.

Money was required to fund roads, public buildings, ports, jails, and schools, as well as to bolster defense against Native Americans and Europeans in border regions. Other public expenditures included maintenance of law and order, the salaries of colonial officials, and, in the case of Massachusetts, support of the Puritan Church.

The colonies used different methods to raise public funds, as described in the table below. The types of taxes applied to a colony, and the rates, changed often. The authority to levy taxes in Britain was a power of Parliament, a representative legislative assembly elected to protect the interests of the people against the monarchy. Similarly, the power of taxation belonged to colonial legislatures, which were composed of elected representatives.

Who/What was taxed?
Massachusetts Property taxes (including land and assets such as boats or mills).

Head tax on males over 16.

Import/export duties on goods moving through the colony.
Virginia Property taxes (often paid in tobacco).

Head tax on males over 16.

Taxes on slaves and native American servants over 16 (paid by owners).

Tax on livestock.

Import/export duties on goods moving through the colony.


3. The Stamp Act

Before enactment of the Stamp Act, colonists paid taxes directly to colonial governments, and indirectly through higher prices on goods. They did not pay taxes directly to the Crown. This tradition was cherished by many colonists, who viewed themselves as full British subjects with all of the rights and privileges of that status, including the right to representation.

The Stamp Act marked a departure from this tradition. It was an internal tax that required colonists to pay a fee on any printed paper they used (e.g., newspapers, legal documents, playing cards, books). The Act was designed to raise money for England, and had little to do with trade. The amounts of money involved were small, but many colonists saw the Act as an internal tax on the colonies, passed by a legislative body across the Atlantic in which they had no representation: a violation of their long-held rights as Englishmen.

As an internal tax, the Stamp Act appeared to be an unconstitutional measure from the colonial perspective because it deprived freeborn British citizens of their liberty, a concept associated with property ownership. According to the unwritten British Constitution, only representatives for whom British citizens had voted could tax them (and thereby take their private property). Since the colonies did not have actual representation in Parliament, many colonists felt deprived of this right of all British citizens and, therefore, of their liberty.

term to know
Actual Representation
The principle that the colonists must be represented in Parliament if they were to be taxed.

Parliament was aware that imposition of an internal tax in its North American colonies broke with tradition and might provoke anger and raise questions of constitutionality. In proposing the Stamp Act, Prime Minister Grenville challenged members of the House of Commons to consider Parliament’s power to raise and collect taxes in any part of the Empire. When no one spoke in opposition, Grenville moved forward. In the Prime Minister’s mind, the Stamp Act was important for two reasons: first, to raise funds for Britain’s coffers and to reduce the cost of maintaining British troops in the colonies; and second, to assert the authority of Parliament over its American colonies and its right to impose internal taxes on any subjects of the British Empire.


4. “Taxation without Representation”

Resistance to the Stamp Act was considerable. Protesters drew from a variety of sources to justify their position, including English political tradition and its unwritten constitution, the writing of Enlightenment philosophers like John Locke, and the separation of governmental powers as a result of the Glorious Revolution. For many in the colonial elite, the issue was not economic, but a matter of constitutional principle.

Benjamin Franklin made this distinction to Parliament in 1766, the year after the Stamp Act was passed, while serving in England as a representative of several colonies. In the excerpt below (Halsey & Bryan, 1906), he testified to the House of Commons about colonial opposition to the Act. Note his suggestion that the colonists objected only to “taxation without representation,” not to the power of Parliament to regulate trade:

Excerpt from Benjamin Franklin's Testimony to the House of Commons, 1766

Q. What was the temper of America towards Great Britain before the year 1763?
A. The best in the world. They submitted willingly to the government of the Crown, and paid, in all their courts, obedience to acts of Parliament.... They had not only a respect but an affection for Great Britain; for its laws, its customs, and manners, and even a fondness for its fashions, that greatly increased the commerce.
Q. And what is their temper now?
A. Oh, very much altered!
Q. Did you ever hear the authority of Parliament to make laws for America questioned till lately?
A. The authority of Parliament was allowed to be valid in all laws, except such as should lay internal taxes. It was never disputed in laying duties to regulate commerce.
Q. In what light did the people of America use to consider the Parliament of Great Britain?
A. They considered the Parliament as the great bulwark and security of their liberties and privileges, and always spoke of it with the utmost respect and veneration. Arbitrary ministers, they thought, might possibly, at times, attempt to oppress them; but they relied on it, that the Parliament, on application, would always give redress…
Q. Was it an opinion in America before 1763 that the Parliament had no right to lay taxes and duties there?
A. I never heard an objection to the right of laying duties to regulate commerce; but a right to lay internal taxes was never supposed to be in Parliament, as we are not represented there.
Q. On what do you found your opinion that the people in America made any such distinction?
A. I know that whenever the subject has occurred in conversation where I have been present, it has appeared to be the opinion of every one that we could not be taxed by a Parliament wherein we were not represented. But the payment of duties laid by an act of Parliament as regulations of commerce was never disputed...
Q. Can anything less than a military force carry the Stamp Act into execution?
A. I do not see how a military force can be applied to that purpose.
Q. Why may it not?
A. Suppose a military force sent into America: they will find nobody in arms; what are they then to do? They can not force a man to take stamps who chooses to do without them. They will not find a rebellion; they may, indeed, make one.
think about it
Why do Franklin’s questioners in Parliament identify 1763 as a turning point in British-colonial relations?

In suggesting that colonists objected to an internal tax, but continued to accept Parliament’s right to regulate colonial commerce, Franklin failed to acknowledge that colonial objections had radicalized. They now included the validity of Parliament’s authority in the colonies and the colonists’ second-class status in the British Empire.

Patrick Henry, a young and immoderate member of the Virginia House of Burgesses, proposed a series of resolutions in 1765 that questioned the authority of Parliament, lacking colonial representation, to tax the colonies. The resolutions, which some believed bordered on treason, were hotly debated. Though not all were approved, they were published in full and disseminated throughout the colonies by the colonial press. The resolutions condemned taxation without representation as destructive of liberty, and branded anyone who supported Parliament’s position of “virtual representation” an “enemy” of the colony:

Resolutions of Patrick Henry, 1765

  1. Resolved, that the first adventurers and settlers of His Majesty's colony and dominion of Virginia brought with them and transmitted to their posterity …. all the liberties, privileges, franchises, and immunities that have at any time been held, enjoyed, and possessed by the people of Great Britain.
  2. Resolved, that by two royal charters, granted by King James I, the colonists aforesaid are declared entitled to all liberties, privileges, and immunities of denizens and natural subjects to all intents and purposes as if they had been abiding and born within the Realm of England.
  3. Resolved, that the taxation of the people by themselves, or by persons chosen by themselves to represent them …. is the only security against a burdensome taxation, and the distinguishing characteristic of British freedom, without which the ancient constitution cannot exist.
  4. Resolved, that His Majesty's liege people of this his most ancient and loyal colony have without interruption enjoyed the inestimable right of being governed by such laws, respecting their internal policy and taxation, as are derived from their own consent …..
  5. Resolved, therefor that the General Assembly of this Colony have the only and exclusive Right and Power to lay Taxes and Impositions upon the inhabitants of this Colony …..
  6. Resolved, That his majesty's liege people, the inhabitants of this colony, are not bound to yield obedience to any law or ordinance whatsoever designed to impose any taxation whatsoever upon them, other than the laws and ordinances of the general assembly aforesaid.
  7. Resolved, That any person who shall by speaking or writing maintain that any person or persons other than the general assembly of this colony have any right or power to impose or lay any taxation whatsoever on the people here shall be deemed an enemy to this his majesty's colony.


think about it
The House of Burgesses ultimately approved the first four resolutions and rejected the final three. Why do you think this was so?
did you know
Virginia’s royal governor dissolved the House of Burgesses following the passage of the Resolves.


5. “Virtual Representation”

Parliament, for its part, rejected the colonists’ position that the Stamp Act violated their liberties and their right to representation. Rather, British politicians argued the colonists had virtual representation in Parliament because all members of Parliament represented all citizens of the British Empire, not just those of their individual districts. They pointed out that most British citizens did not meet the property requirements necessary to vote in elections and were, nonetheless, considered to be represented in Parliament.

term to know
Virtual Representation
The principle that colonists did not have equal standing before Parliament and, therefore, did not require actual representation.

Soame Jenyns, a British writer and member of Parliament, published an argument for the Stamp Act and for the legitimacy of “virtual representation” in a pamphlet entitled The Objections to the Taxation of the American Colonies, in 1765. In it, he wrote the following:

The Objections to the Taxation of the American Colonies, Soame Jenyns, 1765

The right of the legislature of Great Britain to impose taxes on her American Colonies, and the expediency of exerting that right in the present conjuncture, are propositions so indisputable clear, that I should never have thought it necessary to have undertaken their defence, had not many arguments been lately flung out, both in papers and conversation, which with insolence equal to their absurdity deny them both…

… [to the argument that] no Englishman is, or can be taxed, without the consent of the majority of those, who are elected by himself, and others of his fellow subjects, to represent them. This is certainly as false …. for every Englishman is taxed, and not one in twenty represented: copyholders, leaseholders, and all men possessed of personal property only [as opposed to land], chuse no representatives: Manchester, Birmingham, and many more of our richest and most flourishing trading towns send no members to parliament, consequently they cannot consent by their representatives, because they chuse none to represent them; yet are they not Englishmen? Or are they not taxed?

...why does not this imaginary representation extend to America, as well as over the whole island of Great Britain? If it can travel three hundred miles, why not three thousand; if it can jump over rivers and mountains, why cannot it sail over the ocean? If the towns of Manchester and Birmingham sending no representatives to parliament, are notwithstanding there represented, why are not the cities of Albany and Boston equally represented in that assembly? Are they not alike British subjects? Are they not Englishmen? or are they only Englishmen when they solicit for protection, but not Englishmen when taxes are required to enable this country to protect them?
think about it
Why did Jenyns compare the colonial situation to those of English towns such as Manchester and Birmingham?

political cartoon on Virtual Represenation

In this 1775 political cartoon, “Virtual Representation”, a member of Parliament (in brown robes, center) gives the British “One String Jack” permission to rob the American colonists (right) at gunpoint, while “Britannia,” a symbol of the British Empire (represented by a woman in classical form), walks blindly into a pit.

summary
The Stamp Act was one of the first in a series of conflicts between Britain and its North American colonies over the authority of Parliament to intervene in colonial affairs. While a series of new taxes proposed by Parliament following the French and Indian War lit the revolutionary flame in the colonies, the American Revolution cannot be explained by opposition to paying taxes. The Stamp Act generated vigorous debate on both sides of the Atlantic over constitutional issues of representation and abuse of governmental power. Ultimately, the conflict would be resolved through war.

This tutorial curated and/or authored by Jessica Foley, Ph.D

Source: Image of “Virtual Representation,” Creative Commons/Public Domain, http://bit.ly/2jJ4KMe, Bryan, W. J., & Halsey, F. W. (1906). The world's famous orations. Retrieved January 6, 2017, from http://bit.ly/2jJfvhT, Jenys, S. (1765). The Objections to the Taxation of the American Colonies. Retrieved January 6, 2017, from http://bit.ly/2j4efoe, Derived in part from Openstax tutorial 5.2, http://bit.ly/2jWS2qI Some sections edited or removed for brevity. The Virginia Resolves. (1765. June 24). Newport Mercury. Retrieved January 8, 2017 from http://bit.ly/2kHz48b

Terms to Know
Actual (Direct) Representation

The principle that the colonists needed to be represented in Parliament if they were to be taxed

Virtual Representation

The principle that colonists did not have equal standing before Parliament and, therefore, did not require actual representation