Friday, August 05, 2005

Foundations In Tax Revolt

Should we stop whining about how much we pay in taxes? Sure, it's a lot, but we get roads, police, national defense, public education and other services. The argument against taxes that we usually hear is that they are excessive, government is inefficient, and we're paying in more than we're getting back.

The United States started as a tax revolt against what the colonists claimed were oppressive taxes imposed by the British Empire. Just how 'oppressive' were these taxes that started this revolution?

In Massachusetts, Pennsylvania and Maryland, taxes amounted to 22 cents per person per year, in New York, 15 cents per person per year, in Connecticut, 13 cents per person per year, and in my home state of Virginia, 10 cents per person per year.[1] Salaries in the colonies ranged from $60-100 per year -- a high salary compared to the rest of the world. Colonists paid only 1/3 of a percent (0.33%) in taxes at most! In Virginia, the tax burden was around 1/10 of a percent of a typical yearly salary.

Compare this to the taxes paid in Great Britain, $5.76 per person per year, and Ireland, $1.47 per person per year.[2] Why didn't they revolt against oppressive taxes? The people of Great Britain paid over 26 times the taxes of the highest paying colonists and the people of Ireland paid at least 6 times the amount the colonists paid.

Were the colonists receiving less than the people of Britain or Ireland? The per capita maintenance expense for the colonies was 95 cents per person, so this was not the case; in fact, British and Irish taxpayers were subsidizing the colonies, not the other way around!

Why were the colonists the ones to revolt? The reason cannot be explained through economics -- the colonists weren't paying in more than they were getting. They objected on principle. They considered the tax system itself to be illegitimate.

[1] Palmer, R., The Age of Democratic Revolution, Princeton University Press, 1969, p. 155.
[2] Ibid.

*Note: I am out of town for the next few days, so posts may be sporadic.

1 comment:

Unknown said...

good