Raleigh NC CPA

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

“Slavery – the one cause of the Civil War.” – John Stuart Mill, 1862

Could there be any doubt concerning it? Of course the American Civil War was about the slavery issue… was it not? Well actually, one of the most hoaxes in American history is that the Civil War was started because of slavery and that Lincoln, the Great Emancipator, started a bloody struggle to break the chains of bondage that enslaved over three million black Americans. Right before the war, the South had everything it could have wanted.

In 1860, the South held the Supreme Court and Lincoln and Congress were approving a constitutional amendment to keep slavery for all time! What happened?

We should move the time back to the year 1832. By that year the national debt from the War of 1812 had been paid and Southerners saw no need to keep up the exorbitant import taxes which appeared to only raise prices for the South’s consumers. Either the South paid high import taxes on foreign goods or it purchased Northern manufactured goods at excessive prices. Either way, the South’s money transferred to the North. To say the South was not content with this arrangement would be an understatement. 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!

Consequently, in 1832 a convention was held in South Carolina to nullify these federal import taxes. The convention decided the tax was unconstitutional and authorized the governor to defy the enforcement of these taxes instituted by the national government. It looked like a civil war was in the making. Mild tempers prevailed, however, and the Great Compromise of 1833 reduced import taxes over the next few years to levels the South would tolerate. Go here if you want help with a modern-day Tax Return in Raleigh, NC.

Over the next few years, however, Northern corporate and manufacturing interests bullied into Congress more taxes that again oppressed Southern planters and made Northern manufacturers become rich. In 1850, John C. Calhoun, the South’s most exceptional spokesman, delivered a speech to Congress. It listed 3 grievances of the South that may cause secession from the Union and war. The first two had to do with fears concerning the erosion of power of the South in general and the states as well.

The third, and only concrete grievance, concerned taxation. In Calhoun’s view, national import taxes was a targeted legislation against the South. Heavy taxation on the South created funds that were used in the North. The focus of economic life in the United States was steadily changing heavily to the North. Calhoun threatened secession if the taxes weren’t reduced. But what about the slavery issue? Well, during his campaign for the presidency in 1860, Lincoln repeatedly said he wouldn’t do anything about slavery in the South. Truly, most Northerners didn’t really care about black men in bondage, just as little as how much they worried about the Indian in the West or impoverished illiterate workers in factories. By and large many black slaves got substantially better quality treatment and more compassion than their counterparts in the North. Lincoln, in fact, assured Southern slave-owners that run-away slaves would be caught. The Congress and then the Supreme Court (Dred Scott decision) continually acknowledged that slavery was here to stay.

But, just as Lincoln was elected and Congress came together in 1861, they created new high import tariffs. Slavery was not an problem – higher import taxes were. In his inaugural address Lincoln said he would collect the customs in the South even if there was a secession!

Fort Sumter, near the beginning of the Charleston Harbor, began filling with federal troops to enforce the collection of the new taxes. The Civil War started in 1861 when South Carolinians shot at the federal garrison at Fort Sumter. The inevitable had been brewing for decades – but it wasn’t about slavery. It was over tax policy.

Two years after that, Lincoln issued the Emancipation Proclamation, and then only following repeated military defeats, as the last resort to rally the North to a noble cause. To address the slave issue – most the North cared little about black people in bondage, any more than they cared about Indians to the west and the poor uneducated workers in the factories. For the most part, many black slaves received better treatment and more compassion than their impoverished counterparts in the North.

That’s it for the History of Taxes Series!

http://www.marccpa.com/

Raleigh NC CPA

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

Ah…. finally a historical event clearly concerning oppressive 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! They had actually smuggled in Dutch tea and were doing quite well. There was tea for anyone who wanted it and no British tea tax paid. Naturally, the British did not like the boycott. So, the British bypassed the duties at home. The Parliament allowed British tea sellers to disregard the import tax of shipping the tea to England and then transfer the money saved along to the colonies as they sent the tea over and then 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 in the colonies. But would the colonists buy the cheaper British tea even though it included a tax? Yes. So much so that what ended up happening was loyal British merchants got all the business and the taxes were still being paid to England. Obviously the colonists did not care about the tax very much; they ended up receiving cheaper tea. BUT, the non-British MERCHANTS didn’t enjoy this gig. The British merchants, with the assistance of England, had basically created a monopoly on tea sales. The native merchants feared it was only a matter of time before more 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 group of MERCHANTS dressed up as Natives, walked on a ship loaded with British tea and dumped it into the harbor. Was this a shining peak in American tax protest? Not at all. The Boston Tea Party was looked at as the senseless destruction of private property at a time when private property was viewed as very important. This event was extremely grave and did not sit well with the colonists. Ben Franklin was abhorred and demanded that complete restitution would be paid at once to the owners of the tea. Anyway, it turned into war.

However, the colonists would quickly learn that fleets of warships, battalions of soldiers, and cannons were a lot more terrifying than a few tax collectors. The ironic thing is, America won the war, primarily due to the fact that England found it too expensive to fund war so far from home. BUT after the war, America faced 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/

Raleigh NC CPA

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

No modern revolution that was more deeply rooted in tax problems. Tax issues not only caused it, but helped unify the disorganized and disagreeing colonies. However, maybe not precisely the way you think. 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!

First, the British taxation on the colonies were neither not fair nor oppressing on the people. In fact, Americans had it great: we had the help of Britain, our land was rich, business was good, and there were jobs for everyone. Europe’s social castes didn’t limit the citizens and our sons were not forced to fight in wars in far-off places… we had it good. So what happened? Well, some missteps and misstatements by both sides. Go here if you want help with a modern-day Tax Return in Raleigh, NC.

“Taxation without representation” was indeed a problem. The problem was, nobody quite knew what to do about it (after the American revolution, other colonies such as Canada and Australia found adequately achievable solutions). But at the time there wasn’t agreement by the British parliament or American leaders on what could be done to avoid “taxation without representation”. Ben Franklin, unknowingly I presume, complicated the issue. He went over to England as our liaison and told the British that internal taxes were unacceptable but external taxes were OK.

By internal taxes, Franklin meant the paper tax and any other taxes that were paid on transactions in the actual colonies themselves. External taxes, by the colonists’ definition, were those such as import taxes that were placed upon transactions that only in part took place in 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 little sense. No one caught on to the connection between import/export taxes and the ultimate prices paid for the products. In other words, import/export taxes worked against the “other guy” so they were OK.

OK, said the British parliament. if that’s what you want we’ll play along and give you whatever it takes to make you happy. So, the British created new tariffs, import and export taxes. Then, Americans decided they made a mistake. They saw the flaw of their logic… however, it was too late and the situation worsened.

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/