Taxes and more taxes were the catalyst for America's break from England

Friday, July 4, 2014

By Farrokh Langdana, director, Executive MBA Program and professor of Finance & Economics.

On this Fourth of July weekend, it might serve us well to note that tax increases were the catalyst for the first revolt in Boston. The first tax was on the importation of black tea from China into the colonies, and it was levied mainly to offset the huge costs of the French Indian War incurred by England. Of course, the British East India Company had a monopoly on shipping the tea from China, so this was doubly aggravating.

Other taxes followed, such as the Stamp Tax, which resulted in the prompt resignation of all the stamp commissioners in the colonies. While many of these taxes were abolished or cut back, they all served to hammer more nails into the coffin of public confidence and drive home the fact that England could not be trusted to govern the colonies fairly.

Phrases such as "Life, Liberty and the Pursuit of Happiness" and "inalienable rights" were not on anyone's radar screen until much later.  It was taxes, taxes, taxes, and arrogance. 

Tax and Spend governments, take heed.

More of Professor Langdana's blogs can be found at business.rutgers.edu/langdanamacro. Follow him on Twitter @FSCwithFarrokh.

TAGS: Business Insights Executive MBA Farrokh Langdana Finance MBA Taxation Thought Leadership