Who made the colonies pay taxes?
Parliament passed the Stamp Act on March 22, 1765, to pay down a national debt approaching £140,000,000 after defeating France in the Seven Years War (1763). A year earlier, Parliament passed the Sugar Act, their first revenue-raising measure. Both taxes promised dire consequences in a post-war economy.
Parliament's first direct tax on the American colonies, this act, like those passed in 1764, was enacted to raise money for Britain. It taxed newspapers, almanacs, pamphlets, broadsides, legal documents, dice, and playing cards.
England's Seven Years' War (1756–1763) and its counterpart waged in America, the French and Indian War (1754–1763), doubled Britain's national debt. In order to recoup some of the losses Britain incurred defending its American colonies, Parliament decided for the first time to tax the colonists directly.
In an effort to raise funds to pay off debts and defend the vast new American territories won from the French in the Seven Years' War (1756-1763), the British government passes the Stamp Act on March 22, 1765.
The Colonies React
They refused to pay the tax. The tax collectors were threatened or made to quit their jobs. They even burned the stamped paper in the streets. The colonies also boycotted British products and merchants.
The attempts by Britain to tax its North American colonists in the late 1700s led to arguments, war, the expulsion of British rule and the creation of a new nation. The origins of these attempts lay, however, not in a rapacious government, but in the aftermath of the Seven Years' War.
The British needed to station a large army in North America as a consequence and on 22 March 1765 the British Parliament passed the Stamp Act, which sought to raise money to pay for this army through a tax on all legal and official papers and publications circulating in the colonies.
In short, many colonists believed that as they were not represented in the distant British parliament, any taxes it imposed on the colonists (such as the Stamp Act and the Townshend Acts) were unconstitutional, and were a denial of the colonists' rights as Englishmen.
The American colonists were angered by the Stamp Act and quickly acted to oppose it. Because of the colonies' sheer distance from London, the epicenter of British politics, a direct appeal to Parliament was almost impossible. Instead, the colonists made clear their opposition by simply refusing to pay the tax.
The Stamp Act of 1765 was the first internal tax levied directly on American colonists by the British Parliament.
When did the colonies stop paying taxes?
The Taxation of Colonies Act 1778 was an Act of the Parliament of Great Britain under the order King George III that declared Parliament would not impose any duty, tax, or assessment for the raising of revenue in any of the colonies of British America or the British West Indies.
A variety of direct and indirect taxes was gradually imposed on the colonists. The corporate colonies in New England enjoyed the legal right to levy direct taxes on their residents, which stemmed from the right of trading corporations to levy assessments on their stockholders.
The Start of Familiar Taxes
Ancient Rome administered a sales tax. Julius Caesar was the first to implement a sales tax: a 1 percent flat rate that was applied across the entire Empire. Under Caesar Augustus, the sales tax was 4 percent, closer to a rate we see today in many U.S. state sales taxes.
Taxes were normally paid in tobacco, because cash was rare in the colony. There was no graduated income tax like today, where the tax rate is based on income levels and those with higher incomes pay more per dollar earned.
The Stamp Act of 1765 was the first internal tax levied directly on American colonists by the British Parliament.