The Lesson in Tax Law, Chapter 8: Tax and The Boston Tea Party
Ah…. now we have a historical event clearly about abusive taxation. Was the Boston Tea Party a protest concerning the British tax on tea, as we were told? No, not one bit. The colonies had already been boycotting English tea for 5 years before to the Boston Tea Party! They had actually smuggled in Dutch tea and were quite prosperous. There was tea for everyone and no British tea tax paid. Naturally, the British didn’t like the boycott. So, the British bypassed the duties at home. The Parliament told British tea merchants to disregard the import tax of getting the tea into England and then transfer the money saved along to the colonies when they sent the tea over and then sold British tea at a price lower than the Dutch smuggled tea.
But what people would sell this British tea?
They sold it through loyal British merchants 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 got all the business and a taxes were still being given to England. Obviously the colonists did not care about the tax very much; they still were receiving cheaper tea. BUT, the non-British MERCHANTS did not enjoy this gig. The British merchants, with the help from England, had essentially established a monopoly on tea sales. The colonial merchants feared it would only be a matter of time before additional monopolies would be created with the same mechanism and they would be forced out of business.
So, a collection of MERCHANTS who appeared to be Natives, boarded a vessel containing British tea and tossed it into the harbor. Was this a crowning moment in American tax protest? No, it was not. The Boston Tea Party was looked at as the wanton desecration of private property at a period when private property was highly regarded. This event was extremely looked down upon and didn’t sit well with the colonists. Ben Franklin was shocked and told the merchants that full repayment would be given at once to the owners of the tea. Anyway, it escalated into war.
However, the colonies would soon realize that fleets of war vessels, legions of redcoats, and cannons were much scarier than a few tax collectors. The funny thing is, America didn’t lose the war, primarily because England realized it was too expensive to fund war so far from home. BUT after the war, America had huge debts and taxes, and even with representation they were going to be huge.
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/
