Taxation, Representation, and America's 250th
Taxation with Consent of the Governed, From Magna Carta to Boston Harbor
The greatest pre-revolutionary orators were, by popular assent, Patrick Henry from the southern colonies and James Otis from the northern colonies, yet we have almost no contemporaneous records of their remarks.
Patrick Henry’s impassioned speech at St. John’s Church in Richmond, swelling to the cry of “Give me liberty or give me death,” was the work of a later biographer with no direct knowledge of anything beyond the broad themes of Henry’s remarks in Church Hill. And James Otis, elevated in revolutionary memory by John Adams and others seeking a northern champion to rival Henry, wrote a pamphlet on the rights of the British colonies asserting that “[t]he supreme power cannot take from any man any part of his property, without his consent in person, or by representation,” but it was a later biographer who sharpened the line into “taxation without representation is tyranny.”
By 1776, however, both lines, however embellished, were in broad circulation, and they stood for two slightly different sets of revolutionary complaints.
The Declaration of Independence, drafted by a southerner, asserted the self-evidence of unalienable rights, including something as expansive as the pursuit of happiness, departing from the Lockean formula of life, liberty, and property. Northerners were more prosaic and preferred to present a bill of particulars rather than espousing an expansive ideological case. For the north, the problem wasn’t so much that King George was interfering with the pursuit of happiness. The problem was taxes and a lack of representative government.
Southerners cared about taxes, too. They spoke of oppressive taxation, complaining of burdens intended to impoverish the colonies. The northern leaders knew better; after all, colonial taxation was incredibly light, far lower than in England, and not even enough to cover the costs of colonial administration. No, the problem was not that taxes were high: they would be much higher after independence. The problem was that they were arbitrary, occasionally capricious and punitive, and, most importantly, imposed without the consent of the governed.
Taxation and consent have long been entwined, even under relatively unrepresentative governments. There are many things that governments can accomplish against the people’s wishes, but taxation is too large an undertaking to be carried out without at least tacit consent. Throughout history, tax compliance has been the exception rather than the rule. Champions of liberty, moreover, historically recognized their power to resist taxation as a vital bargaining chip in securing other liberties.
Tax revolts have a storied place in history: opposition to oppressive taxation, real or imagined, has inspired passionate reactions from everyone from Lady Godiva to the Whiskey Rebels. It undergirded the English Civil War and the American Revolution; it helped shape the French Revolution; it got Karl Marx arrested. Sometimes taxes really were the point. Other times they were the blunt instrument of power.
The withholding of revenues forced King John to parley with his nobles at Runnymede, and Magna Carta’s reaffirmation in 1297 saw the nobles trade new revenues for a pledge of “no aid, task, or prise” without common consent. The fight over “ship money” helped precipitate the English Civil War. And the royal need to secure cooperation on new revenues, often to fund wars, helped the English Parliament secure its own power.
Originally, parliament held little sway. Kings could ignore them, prorogue them, or even arrest their members. What they couldn’t do, at least not easily, was fill their own coffers without the consent of parliament, which is to say, the wealthy landed elite. Parliament after parliament traded its agreement to taxes for increased power over the prerogatives of government.
There can be little doubt that taxes hold pride of place in the causes of the American Revolution. Colonists protested the Stamp Act and the Navigation Acts; they rechristened one set of parliamentary enactments the Intolerable Acts, which left little room for interpretation; they boycotted dutiable goods; led by troublemakers like Samuel Adams and John Hancock, they turned to smuggling to evade tariffs; and, of course, when their smuggling outfits were undercut by reduced duties, rather than accept the legitimacy of even a low tariff, they brewed their tea in Boston Harbor.
For many years, during the period of “salutary neglect,” the American colonies were scarcely taxed. But as Britain reeled from one European conflict to another—the War of the Spanish Succession, the War of the Quadruple Alliance, the Seven Years’ War, and others—and as it labored under the strain of supporting the East India Company throughout these conflicts, Britain fell deeply into debt and increasingly saw the colonies as a way to replenish the Exchequer.
The amounts demanded weren’t extreme. Indeed, during and after the Seven Years’ War, the high-water mark of supposedly oppressive colonial taxation, the levies weren’t nearly enough to cover the cost of the military defense of the colonies in the North American theater, where it was called the French and Indian War.
British debt ran to 140 percent of gross national product, and 45 percent of British tax revenues went to servicing the debt. Effective tax rates in England exceeded 11 percent of national income; in the colonies, they were but a fraction of a percent, and most of that local. From Britain’s perspective, surely an additional levy or two wasn’t unreasonable.
But it wasn’t about the money. Frequently, colonial assemblies refused to even remit sums necessary to pay the salaries of colonial governors. It was about a principle: the power of the purse belongs to the people. The colonists saw this not as a new right, but as the rights of Englishmen, hard-won in a battle stretching from Magna Carta through the Civil Wars, surviving the Stuart Restoration and coming to full blossom in the Glorious Revolution. It was a heritage, it was a right—and it was being denied them.
Parliament couldn’t see this. The king couldn’t understand. Weren’t the colonists heavily subsidized? This wasn’t how the mercantile system was supposed to work. Colonies were supposed to enrich the mother country, not the other way around, yet here were these colonists, a drain on the country’s finances, and they had the gall to protest—violently protest!—a few stamp duties?
There were solutions, surely. The colonies could elect their own members of parliament, as some proposed. Their votes would have been drowned out by those of the English MPs, but there were nearly four times as many residents of the Isles as there were of British North America. On the fringes, there were even suggestions for a North American parliament.
To the colonists, though, these were sops; neither gave them a meaningful say over their own taxation. It wasn’t how much they were taxed, but whether it was given by their consent.
Our system of taxation has changed a great deal in the 250 years since 1776. The 4-million-word federal tax code has little in common with a system in which taxes were sometimes denominated in hogsheads of tobacco, or in which a tax could be levied for something as small and specific as paying the salary of a single government employee. We don’t have the founders’ tax code—but we have their enduring principle of representative government that reflects the consent of the governed.
Happy Independence Day weekend!
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