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  • Taxation Without Representation: Why We Celebrate July 4th

Taxation Without Representation: Why We Celebrate July 4th

Kelly Phillips ErbJuly 4, 2015

On July 4, 1776, the Continental Congress formally adopted what we call The Declaration of Independence. The Declaration of Independence is exactly what it sounds like: an announcement to the world that the United States of America had voted to declare its independence from King George III and Great Britain.
This was a big deal. The British had ruled the colonies since the early 17th century. In what’s now the US, Virginia Company became the Virginia Colony in 1624 – the first of what we consider the original thirteen colonies.
The US wasn’t the only part of the world – or even the only part of the Americas – which had been subject to British colonization. The British had also taken over parts of Canada, the Caribbean and South America. Their influence and wealth were vast and their holdings were enormous.
But ruling the world gets expensive. Guarding colonies and occasionally invading new ones takes money and sometimes resulted in fights with other empires. That’s exactly what happened in the mid-18th century when Great Britain found itself battling a number of countries – but primarily France – in the Seven Years’ War. When the war ended in 1763, Great Britain retained much of its world dominance but the years of fighting came at a significant cost: the British government was nearly bankrupt.
The King needed to raise revenue – and quickly. What better way than a series of taxes and tariffs? And who better to tax than subjects who were far enough away – like the American colonists – to muffle the complaining. There was just one problem with this plan: the King underestimated exactly how loudly the colonists would react.
The first big post war tax, the Stamp Act of 1765, required that materials which were printed and used in the colonies, like magazines and newspapers, be produced on stamped paper and embossed with revenue stamp. The revenue stamp indicated that a tax had been paid on the materials. The idea of the tax didn’t go over very well and the act was repealed the very next year.
The second attempt at raising revenue was a series of acts which came to be known as the Townshend Acts of 1767. Individually, they were known as the Revenue Act of 1767, the Indemnity Act, the Commissioners of Customs Act, the Vice Admiralty Court Act and the New York Restraining Act. The idea behind the series of taxes, after the failure of the Stamp Act, was to try a system of indirect taxes since the colonists had reacted so strongly to the direct stamp tax. However, the result was no different. The colonists were not pleased with the new system which required them to pay taxes on imports of paper, paint, lead, glass and tea; opposition started the same year. Three years after the taxes were imposed, they were partially repealed.
Not every tax under the Townshend Acts was repealed, which irritated the colonists. In 1773, the Tea Act was imposed – on top of the remaining Townshend Acts – which was the last straw for many colonists. Interestingly, the Tea Act did not actually impose any new taxes on the colonies but it did keep in place the duty on tea imported to the colonies established by the Townshend Act. The purpose of the Tea Act was to give the East India Tea Company a trade advantage, more or less cutting out the ability of the colonists to do business on their terms. The colonists viewed this as another way they were being control. The colonists plotted to disrupt the trade and turned away British ships carrying tea headed for Philadelphia and New York. Boston, however, was different. The Governor wouldn’t allow the ships to be turned back and the colonists would not allow the ships to unload. It was a stand-off. Eventually, colonists snuck onto the ships and dumped out the tea resulting in what would eventually be called the Boston Tea Party.
With the Boston Tea Party, the stage had been set for a revolution. First, the colonists needed to advise the King of their position. They did so with a letter – that letter became the Declaration of Independence. When the Declaration was being drafted, the colonists felt that it was important that the exact reasons for their unhappiness were made clear. The largest section of the Declaration – after the lines that we all memorized in elementary school – is a list of grievances against the King. Of course, included in the list were taxes:

The history of the present King of Great Britain is a history of repeated injuries and usurpations, all having in direct object the establishment of an absolute Tyranny over these States. To prove this, let Facts be submitted to a candid world.
…
For imposing Taxes on us without our Consent:

The word “Consent” was important. Under the British Constitution, no British subjects could be taxed without the consent of their representatives in Parliament. But the colonies didn’t elect representatives to Parliament. They were, however, clearly being taxed. The colonists considered the constant imposition of taxes without a vote to be unconstitutional. It was, they felt, “taxation without representation.”
The idea that the colonists had such little control over their own lives didn’t just lead to the penning of the Declaration of Independence and the accompanying vote, it set the United States down the road to real independence. That spirit is what we celebrate today, on July 4.

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Kelly Phillips Erb
Kelly Phillips Erb is a tax attorney, tax writer, and podcaster.
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Declaration of Independence, history, July 4, tax history, taxation without representation, Townshend Act

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