Death and taxes. They say those are the only two things we can count on in life. America’s birthday reminds us of both—the settlers who fought to their death, and the high taxes they fought to free us from. Taxes can be a funny thing. Many of America’s original settlers were folks who would get a bad taste in their mouth at the mere mention of that word. They came seeking freedom and, for the most part, wanted to be left alone. As history shows, they were willing to fight to have it that way. In 1765, Britain attempted a direct tax via the stamp act, but the colonists would have none of it. Ben Franklin argued that while the colonies might not object to some tariffs, direct taxation was a non-starter. Luckily, the King and his cohorts saw the wiser of it and decided to change tactics. Rather than a direct tax, the cunning Brits decided to give some duties and tariffs a try.
Unfortunately for the King, the settlers decided that whether you call it a stamp tax, duty, or tariff, it was still a tax, and they weren’t gonna pay it. These new settlers couldn’t seem to find a tax they liked, no matter how Parliament packaged it. Having fled all that they knew and loved, they were not going to be a slave to the tax man again—especially one that showed up on a ship from across the ocean. How difficult a job it must have been for the King’s tax collectors! The poor fellows must have trembled as they rode into town on their horse, asking for the King’s share. And well they should! Their version of “fair share” equated to an obscene 1-2% of a settler’s income. Well, it certainly seemed obscene to them at the time, the idea of paying 2% taxes! Imagine. Of course, they couldn’t see into the future any better than we can now. If they could have even fathomed the idea of 35% taxes, they may have felt differently. Instead of ponying up their 2%, this new breed was more apt to tar and feather Mr. Tax Collector than pay such a rate.
The poor king didn’t seem to have the stomach for resistance. He’d come out of his corner ready to tangle, but once the settlers rose to meet him, his knees got weak, and he’d forget to keep his hands up. First, he backpedaled on taxes, and now he faced resistance on duties. We feel sorry for the guy. You see, the problem with being the big Kahuna is you occasionally have to be able to back up your demands. If you don’t, no one will take you seriously. He could ask the settlers to pay up, but if they refused, what could he do? He was on the other side of the Atlantic. He didn’t have the 76,000 employee strong IRS or their $11.5 billion budget. He didn’t have their Criminal Investigation Division, armed with military weaponry, able to dig into your personal business and seize your assets until you proved you were worthy of them. He had a guy on a horse, afraid for his life, and not much else. So, in an effort to save face, while still showing who’s boss, he left the tax on tea. It was meant to be a little reminder that he could tax, if he really, really wanted to.
Big mistake. On December 16, 1773, brave members of the sons of liberty (well, maybe not too brave, since when it came down to it, they hid their identities by dressing like Mohawk Indians) boarded a few ships moored in Boston Harbor and destroyed over 92,000 pounds of tea. Things escalated from there, and before all was said and done, the land of the free and the home of the brave was made official. So, in honor of America’s birthday, hat tip to those brave souls that fought to the death for our freedom. We certainly appreciate not being under the thumb of the British, and enjoy the freedoms that we have, but we wonder what those tea party protesters would have to say about today’s average 31.5% tax rate?