On December 16, 1773, about 100 Sons of Liberty disguised themselves as Mohawk Indians and boarded three English merchantmen carrying a cargo of Bohea tea. The Americans used hatchets to open the 342 chests of tea and dumped a total of 92,000 pounds of tea into Boston Harbor to protest the Tea Act of 1773. The tea was valued at £9,000, or $1.7 million in today’s currency. The British were, understandably upset with Bostonians, and relations became tense.
Why did a tax on tea ignite so much resistance?
On the surface, the Tea Act doesn’t seem to have had malicious intent. The British Parliament passed the Act to give the East India Company a monopoly on the sale of tea, and undercut the price of the tea Americans smuggled into their colonies.
But it was more, because the struggle over taxation rights had been going on for almost twenty years. Delegates at the Stamp Act Congress of 1765 declared that “it is inseparably essential to the freedom of a people, and the undoubted rights of Englishmen, that no taxes should be imposed on them, but with their own consent, given personally, or by their representatives.” Parliament repealed the Stamp Act in 1766, and replaced it with the Townsend Acts.
The Townsend Acts of 1766 and 1767 included indirect taxes on glass, lead, paints, paper, and tea. Americans vigorously protested the right of Britain to tax them when no American was a member of Parliament. Eventually, Parliament repealed the taxes, except the tax on tea. Parliament wanted the colonies to know, in no uncertain terms, that Parliament had the sole authority to tax the American colonies.
“No Taxation Without Representation”
In 1789 the recently independent American states ratified the United States Constitution. At the time, Benjamin Franklin famously declared that
Our new Constitution is now established, and has an appearance that promises permanency; but in this world nothing can be said to be certain, except death and taxes.
Indeed, the United States Congress divided into the House of Representatives and the Senate, shall have Power To lay and collect Taxes, Duties, Imposts and Excises, to pay the Debts and provide for the common Defense and general Welfare of the United States; but all Duties, Imposts and Excises shall be uniform throughout the United States.” [Article 1, Section 8]
And also All bills for raising Revenue shall originate in the House of Representatives. [Article 1, Section 7] Thus, Americans were represented in Congress through their representatives, and since representatives served two-year terms, voters would be able to remove a representative if he did not represent their interests.
On July 4, 1789, President George Washington signed the first tax law of the United States into law. The Tariff Act of 1789 required foreign ships (i.e., British or French ships) to pay a 50 cent per ton duty on all shipping, whether manufactured or raw products, that were delivered to American ports. American ships delivering the same goods paid 6 cents per ton. [Note: In 1789 $1.00 was worth $36.83 in 2013.]
The average American didn’t notice the tariff’s impact. Moreover, the federal government was still quite small and didn’t require a great deal of revenue.
The First Tax on Income
Americans didn’t have a tax on their personal income until 1862 when President Lincoln created a Commissioner of Internal Revenue. To pay wartime expenses, Americans were taxed 3 percent on incomes between $600 and $10,000, and 5 percent on incomes over $10,000. [In 1862 $1 was worth $32.09 in 2013.]
Most Americans never noticed the new tax on income, but those who did, objected to it. In 1872, Congress repealed the income tax. Between 1868 and 1913, 90 percent of government revenue came from taxes on liquor, beer, wine, and tobacco. This was potentially problematic since the government was much larger than it had been in 1789.
In 1909 President Taft recommended a constitutional amendment giving the federal government the power to tax incomes. Supporters of the amendment thought an income tax was a better method to collect revenue than tariffs. In 1913, Wyoming ratified the 16th Amendment to the constitution, and it went into effect, giving Congress the power to lay and collect taxes on incomes, from whatever source derived.
Since then, it’s fair to say, income taxes have increased steadily. The Revenue act of 1918 imposed a progressive income tax to support the war effort.
And The Revenue Act of 1942, sometimes called the Victory Tax, was the most comprehensive and progressive tax in American history. For the first time, 75 percent of American workers paid a tax on their income. And to reduce the burden of coming up with a lump sum when the tax came due, the government required employers to withhold money from tax payer wages. Of course, if too much money was withheld, the IRS would refund the overage. By the time the war ended in 1945, 90 percent of American workers filed income tax forms.
My investigation into the history of American taxation with representation has enabled me to procrastinate on the process of actually completing my tax return. If you feel grumpy about taxation, remember that through your representative, you have a voice in the taxation process. It may not be a loud voice, but at least you don’t have to dump 342 chests of tea into the nearest body of water to get the federal government’s attention. You can vote.
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Illustrations & A Few Sources
Destruction of Tea at Boston Harbor by Nathayel Corrier 1846; No Taxation Without Representation, Clipart Library; Burning of the Stamp Act, Boston, 1903; Benjamin Franklin 1789 by Joseph-Siffred Duplessis & Jean-Francois Janinet; George Washington by Gilbert Stuart 1796; Civil War Envelope; The Fresh Cow by Charles Lewis Bartholomew, c1913; Detail from Two Tax Collectors by Marinus van Reymerswaele 1540s. Beverly Bird. “A Brief History of Taxes in the U.S.” Investopia. Sept. 3, 2025.
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