CapitalGainsandGames Washington, Wall Street and Everything in Between
I hope Tax Notes won't mind too much if I reprint a great piece
by tax historian Joseph Thorndike here. Since the original
Boston tea party is the subject of so much mythology,
which animates many latter day tea partiers to this day,
it's important to set the record straight. As Thorndike
correctly explains, the Boston tea party was not a revolt
against high taxes, but, ironically, a protest against
a tax cut.
APRIL 8, 2010
Tax History: Four Things You Should Know About the Boston Tea Party
Joseph J. Thorndike
Almost everyone knows a little about the Boston Tea Party.
Most of us learned in grade school about Samuel Adams, his
band of phony Indians, and the tea dumped in Boston Harbor.
We might even know something -- or think we do -- about the
meaning of the event. It was all about taxes, right? Indeed it
was But not the way you might think.
Most of us learned in grade school about Samuel Adams, his
band of phony Indians, and the tea dumped in Boston Harbor.
We might even know something -- or think we do -- about the
meaning of the event. It was all about taxes, right? Indeed it
was But not the way you might think.
The Tea Party has long figured prominently in the folklore
of American nationalism. But it has also been the object of
fierce contention, as political factions have struggled over its
meaning and importance. The modern tea party movement is
only the latest in a long series of claimants to the mantle of
the original event. The Tea Party meant one thing to its original
participants, but it has meant something else to the generations
that followed.
of American nationalism. But it has also been the object of
fierce contention, as political factions have struggled over its
meaning and importance. The modern tea party movement is
only the latest in a long series of claimants to the mantle of
the original event. The Tea Party meant one thing to its original
participants, but it has meant something else to the generations
that followed.
Still, it's worth recalling what the Tea Party first meant.
The public memory of this iconic event may be mutable,
but that doesn't mean its original meaning is lost to us.
Nor does it mean that all claims to the Tea Party heritage
are equally valid. It is, after all, possible to get the history wrong.
The public memory of this iconic event may be mutable,
but that doesn't mean its original meaning is lost to us.
Nor does it mean that all claims to the Tea Party heritage
are equally valid. It is, after all, possible to get the history wrong.
So let's set the record straight. What follows is a primer of sorts:
Four things that everyone -- and especially modern tea partiers
-- should know about the events of December 16, 1773.
Four things that everyone -- and especially modern tea partiers
-- should know about the events of December 16, 1773.
1. The Tea Party was not a protest against high taxes.
The Boston Tea Party was certainly a tax protest, but it was
not a protest against high taxes. In fact, it was sparked by a
tax cut, not a tax hike. The Tea Party was part of a longer
protest against British taxation of theNorth American colonies.
The conflict had its roots in the French and Indian War
(known as the Seven Years' War in Europe). Having run up a
huge debt fighting the war -- and defending the colonies from
external threat -- the British thought the colonists should help
pay it back. But the colonists had other ideas, and they resisted
British attempts to collect new taxes. In 1765 they objected to the
Stamp Act, insisting that Britain could levy taxes only to regulate
trade, not raise revenue.
London capitulated. The next year Parliament took another
run at the colonial purse, imposing the Townshend duties on
a variety of goods imported into the colonies, including paper,
paint, lead, glass, and tea. Once again the colonists organized
boycotts and protests, and once again Britain backed down.
But rather than repeal all the Townshend duties, Parliament
chose to retain the tax on tea, chiefly to underscore
the government's right to impose such a levy. For a while the
colonists seemed content to ignore that imperial assertion.
But in 1773 Parliament passed the Tea Act, which left the
Townshend duty on tea intact, but repealed another tax on
tea imported to Great
Britain for subsequent reshipment to the colonies. This
amounted to a tax cut on colonial tea, promising lower
prices for colonial consumers. Bostonians responded by
dumping their cheap imported tea into Boston Harbor.
The Boston Tea Party was certainly a tax protest, but it was
not a protest against high taxes. In fact, it was sparked by a
tax cut, not a tax hike. The Tea Party was part of a longer
protest against British taxation of theNorth American colonies.
The conflict had its roots in the French and Indian War
(known as the Seven Years' War in Europe). Having run up a
huge debt fighting the war -- and defending the colonies from
external threat -- the British thought the colonists should help
pay it back. But the colonists had other ideas, and they resisted
British attempts to collect new taxes. In 1765 they objected to the
Stamp Act, insisting that Britain could levy taxes only to regulate
trade, not raise revenue.
London capitulated. The next year Parliament took another
run at the colonial purse, imposing the Townshend duties on
a variety of goods imported into the colonies, including paper,
paint, lead, glass, and tea. Once again the colonists organized
boycotts and protests, and once again Britain backed down.
But rather than repeal all the Townshend duties, Parliament
chose to retain the tax on tea, chiefly to underscore
the government's right to impose such a levy. For a while the
colonists seemed content to ignore that imperial assertion.
But in 1773 Parliament passed the Tea Act, which left the
Townshend duty on tea intact, but repealed another tax on
tea imported to Great
Britain for subsequent reshipment to the colonies. This
amounted to a tax cut on colonial tea, promising lower
prices for colonial consumers. Bostonians responded by
dumping their cheap imported tea into Boston Harbor.
2. The Tea Party was prompted by a corporate bailout.
What's not to like about cheap tea? Plenty, at least when it
comes as part of a corporate bailout. Because that's what the
Tea Act was: an 18th-century version of corporate welfare.
What's not to like about cheap tea? Plenty, at least when it
comes as part of a corporate bailout. Because that's what the
Tea Act was: an 18th-century version of corporate welfare.
After Parliament repealed all the Townshend duties except
the tax on tea, colonists seemed to ignore the assertion
of the right to tax the colonies. Boycotts petered out, and
colonial consumers began buying tea again. But not all that
tea was taxed. A large portion -- by some estimates as
much as 90 percent -- came from smugglers, who sold Dutch
tea unburdened by the British duty. Meanwhile Parliament was
struggling to rescue a corporation it had deemed too bigto fail:
the British East India Company. The company was saddled with a
large debt and even larger inventories. Its warehouses were
stocked to the rafters with unsold tea (among other things)
and lawmakers soon hit on a brilliant idea: lower the tax on
company tea, permit its direct exportation to the colonies
and let the company undercut the smugglers.
the tax on tea, colonists seemed to ignore the assertion
of the right to tax the colonies. Boycotts petered out, and
colonial consumers began buying tea again. But not all that
tea was taxed. A large portion -- by some estimates as
much as 90 percent -- came from smugglers, who sold Dutch
tea unburdened by the British duty. Meanwhile Parliament was
struggling to rescue a corporation it had deemed too bigto fail:
the British East India Company. The company was saddled with a
large debt and even larger inventories. Its warehouses were
stocked to the rafters with unsold tea (among other things)
and lawmakers soon hit on a brilliant idea: lower the tax on
company tea, permit its direct exportation to the colonies
and let the company undercut the smugglers.
The colonists, however, were unswayed by the prospect of
legal, affordable tea. Instead they invoked the specter of monopoly
insisting that the East India Company would soon grow too powerful
to resist. Colonial merchants would be ruined, the company would
tighten its grip on the marketplace, and average consumers would be
left at the mercy of a mercantile leviathan. As one writer noted at that time:
legal, affordable tea. Instead they invoked the specter of monopoly
insisting that the East India Company would soon grow too powerful
to resist. Colonial merchants would be ruined, the company would
tighten its grip on the marketplace, and average consumers would be
left at the mercy of a mercantile leviathan. As one writer noted at that time:
The scheme appears too big with mischievous consequences
and dangers to America, [even as we consider it only] as it may
create a monopoly; or, as it may introduce a monster, too powerful
for us to control, or contend with, and too rapacious and destructive
to be trusted, or even seen without horror, that may be able to devour
every branch of our commerce, drain us of all our property and substance
and wantonly leave us to perish by thousands.1
Such complaints carried the day. Rather than settling down with a
nice cheap cuppa, agitators found their way to Griffin's Wharf,
boarded the tea ships, and tossed the imported Bohea overboard.
nice cheap cuppa, agitators found their way to Griffin's Wharf,
boarded the tea ships, and tossed the imported Bohea overboard.
3. The Tea Party was a grass-roots movement -- with an element of AstroTurf.
What moved Bostonians to activism? Ideology certainly played a role.
But so did political leadership, particularly on the part of the Sons of
Liberty, Adams, and Boston's merchant class. It bears repeating that
the colonists were not objecting to the financialburden of the tea tax.
Or any other tax, for that matter. Instead, they
were making a point about political legitimacy. They were more than
willing to pay taxes imposed by their own representatives. But they were
utterly unwilling to pay taxes imposed by Parliament -- a more or less
alien power, given the lack of colonial representation.
What moved Bostonians to activism? Ideology certainly played a role.
But so did political leadership, particularly on the part of the Sons of
Liberty, Adams, and Boston's merchant class. It bears repeating that
the colonists were not objecting to the financialburden of the tea tax.
Or any other tax, for that matter. Instead, they
were making a point about political legitimacy. They were more than
willing to pay taxes imposed by their own representatives. But they were
utterly unwilling to pay taxes imposed by Parliament -- a more or less
alien power, given the lack of colonial representation.
Historian T.H. Breen recently made that point in an article for
The Washington Post. Even after the Tea Party, he noted,
colonists in Massachusetts continued to pay taxes originally
levied by the Crown. But instead of sending the money to British
authorities, they gave it to one of their own leaders. "Anyone who
misses this point risks missing the fact that ordinary American
patriots accepted the legitimate burdens of supportinga government
in which they enjoyed genuine representation,"
wrote Breen. But if complaints about taxation without representation
were necessary to theTea Party, they were not sufficient. Leadership
proved pivotal in mobilizing mass action against the East India
Company and British authority. Many of those organizing the Tea Party
-- and it was a highly organized event -- were drawn from Boston's
mercantile class.
The same class, as it happened, that stood to lose
the most if the East India Company were to get its monopoly.
Popular complaints about taxation were genuine, historian Arthur
Meier Schlesinger observed in 1917, but they were "the flowering,
not the roots, of the tree that had been carefully planted and nourished
by the beneficiaries of the existing business order."2
The Washington Post. Even after the Tea Party, he noted,
colonists in Massachusetts continued to pay taxes originally
levied by the Crown. But instead of sending the money to British
authorities, they gave it to one of their own leaders. "Anyone who
misses this point risks missing the fact that ordinary American
patriots accepted the legitimate burdens of supportinga government
in which they enjoyed genuine representation,"
wrote Breen. But if complaints about taxation without representation
were necessary to theTea Party, they were not sufficient. Leadership
proved pivotal in mobilizing mass action against the East India
Company and British authority. Many of those organizing the Tea Party
-- and it was a highly organized event -- were drawn from Boston's
mercantile class.
The same class, as it happened, that stood to lose
the most if the East India Company were to get its monopoly.
Popular complaints about taxation were genuine, historian Arthur
Meier Schlesinger observed in 1917, but they were "the flowering,
not the roots, of the tree that had been carefully planted and nourished
by the beneficiaries of the existing business order."2
As it played out, the Tea Party itself was certainly a mass protest.
While led by a small cadre of activists, it was carried out by a
much larger crowd. Among those boarding the ships were not just
the invited leaders-- who donned the famous Indian outfits --
but perhaps a hundred spontaneous volunteers, who smeared ash
on their faces to approximate a disguise. Perhaps a thousand more
Bostonians lined the wharf as spectators, forestalling intervention
by British authorities. All these participants were integral to the event.
While led by a small cadre of activists, it was carried out by a
much larger crowd. Among those boarding the ships were not just
the invited leaders-- who donned the famous Indian outfits --
but perhaps a hundred spontaneous volunteers, who smeared ash
on their faces to approximate a disguise. Perhaps a thousand more
Bostonians lined the wharf as spectators, forestalling intervention
by British authorities. All these participants were integral to the event.
But for all its mass involvement, the Tea Party was hardly a mob action.
It was instead a carefully managed (if not entirely scripted) episode of
civil disobedience.
It was instead a carefully managed (if not entirely scripted) episode of
civil disobedience.
4. The Tea Party wasn't always a touchstone of American nationalism.
The Tea Party looms large in the annals of American civil disobedience.
Who can't warm to the notion of outraged citizens moved to public action
against monopolistic tyranny?
The Tea Party looms large in the annals of American civil disobedience.
Who can't warm to the notion of outraged citizens moved to public action
against monopolistic tyranny?
Well, as it turns out, quite a few people. As historian Alfred F. Young
has documented, the Tea Party was more or less ignored by proper
Bostonians or almost half a century after it occurred. The event was
too raucous, too uncontrolled to suit the conservative tastes of
Boston's mercantile gentry. Its tinge of radicalism diluted the dominant
American narrative, which cast the colonists as victims of British
tyranny, not unruly provocateurs.
has documented, the Tea Party was more or less ignored by proper
Bostonians or almost half a century after it occurred. The event was
too raucous, too uncontrolled to suit the conservative tastes of
Boston's mercantile gentry. Its tinge of radicalism diluted the dominant
American narrative, which cast the colonists as victims of British
tyranny, not unruly provocateurs.
By the 1830s, the Tea Party had been rediscovered, rescued from
obscurity by the forces of conservatism. Worried by the efforts
of labor activists to claim the Revolution as a radical precedent for
worker activism, conservatives advanced the notion of a tamer, more
genteel tea party. Indeed, the name "Tea Party" was itself an invention
of the 1830s, adopted in place of the radical-sounding name used
previously: "the destruction of the tea." Parties are just less threatening
than any sort of destruction.
obscurity by the forces of conservatism. Worried by the efforts
of labor activists to claim the Revolution as a radical precedent for
worker activism, conservatives advanced the notion of a tamer, more
genteel tea party. Indeed, the name "Tea Party" was itself an invention
of the 1830s, adopted in place of the radical-sounding name used
previously: "the destruction of the tea." Parties are just less threatening
than any sort of destruction.
Conclusion
Since its rediscovery, the Tea Party has been a political football of sorts.
It has been invoked by tradition-minded conservatives, as well as
reform-minded radicals. Most recently, of course, it's been embraced by
reform-minded conservatives -- an oxymoron of sorts, but real enough
just the same. All of these claims are legitimate. After all, almost
every historical event has a protean quality, its meaning malleable
enough to serve the interests of almost any political faction.
But even as we bend the past to our contemporary agenda, it's
important to stay honest. Over the centuries, the Tea Party has been
many things to many people. But it was still something specific to the
people who lived through it. And don't you forget it.
important to stay honest. Over the centuries, the Tea Party has been
many things to many people. But it was still something specific to the
people who lived through it. And don't you forget it.
NOTES
1 Quoted in Arthur Meier Schlesinger, "The Uprising Against the East India Company," Political Science Quarterly, vol. 32, no. 1 (Mar. 1917), 74.
Comments