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Research Into The Amount Of Tea Tax Inspiring Boston Tea Party

Posted on December 17, 2007
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Part of the Boston Tea Party Series - Previous in series         

On Saturday I posted a first hand account of the Boston Tea Party written by George Hewes, an impoverished colonial cobbler and member of the Sons of Liberty. In that article I stated that it was a 3% tax on tea that inspired the famous Boston Tea Party. Sara left the following comment-

Aahz, I totally agree on the apathy of citizens about paying INTOLERABLE taxes….In my younger days, I stood out in front of the Post Office on April 15, trying to educate people on the illegality of the income tax…I was actually told I wasn’t PATRIOTIC!!…Thanks for the 3% tea tax figure; I’ve spent hours trying to find out just what was the intolerable tax (I thought I learned in school it was 10%) but I can’t seem to find it anywhere on the internet (ONE person claimed it was 1%, but he didn’t seem too verifiable)….I’ve gone through all my books about and by the founding fathers and can’t find it….Did I just imagine an “intolerable tax” or was it referring strictly to the tea tax, do you know?

Unsure, myself, of where I had come up with the 3% figure (I know I recently heard/read it somewhere I considered reliable) this inspired further research into the issue. I started with the Tea Act enacted by the British Parliament in 1773. This was, I believe, the immediate cause of the Sons of Liberty raiding the ships of the East India Company on that fated night 234 years ago. The bulk of the Tea Act is not actually an application of a further tax, but rather a repeal of the customs tax on tea specifically for that single company. Section two of the Tea Act, however, also made the East India Company the collector of all tea taxes in the colonies-

II. And whereas by one other act made in the eighteenth year of the reign of his late majesty King George the Second, (intituled, An act for repealing the present inland duty of four shillings per pound weight upon all tea sold in Great Britain; and for granting to his Majesty certain other inland duties in lieu thereof; and for better securing the duty upon tea, and other duties of excise; and for pursuing offenders out of one county into another,) it is, amongst other things, enacted, That every person who shall, at any publick sale of tea made by the united company of merchants of England trading to the East Indies, be declared to be the best bidder for any lot or lots of tea, shall, within three days after being so declared the best bidder or bidders for the same, deposit with the said united company, or such clerk or officer as the said company shall appoint to receive the same, forty shillings for every tub and for every chest of tea; and in case any such person or persons shall refuse or neglect to make such deposit within the time before limited, he, she, or they, shall forfeit and lose six times the value of such deposit directed to be made as aforesaid, to be recovered by action of debt, bill, plaint, or information, in any of his Majesty’s courts of record at Westminster, in which no essoin, protection, or wager of law, or more than one imparlance, shall be allowed; one moiety of which forfeiture shall go to his Majesty, his heirs and successors, and the other moiety to such person as shall sue or prosecute for the same; and the sale of all teas, for which such deposit shall be neglected to be made as aforesaid, is thereby declared to be null and void, and such teas shall be again put up by the said united company to publick sale, within fourteen days after the end of the sale of teas at which such teas were sold; and all and every buyer or buyers, who shall have neglected to make such deposit as aforesaid, shall be, and is and are thereby rendered incapable of bidding for or buying any teas at any future publick sale of the said united company: and whereas it is found to be expedient and necessary to increase the deposit to be made by any bidder or bidders for any lot or lots of bohea teas, at the publick sales of teas to be made by the said united company; be it enacted by the authority aforesaid, That every person who shall, after the tenth day of May, one thousand seven hundred and seventy-three, at any publick sale of tea to be made by the said united company of merchants of England trading to the East Indies, be declared to be the best bidder or bidders for any lot or lots of bohea tea, shall, within three days after being so declared the best bidder or bidders for the same, deposit with the said united company, or such clerk or officer as the said united company shall appoint to receive the same, four pounds of lawful money of Great Britain for every tub and for every chest of bohea tea, under the same terms and conditions, and subject to the same forfeitures, penalties, and regulations, as are mentioned and contained in the said recited act of the eighteenth year of the reign of his said late Majesty.

This also gives us a tax rate of 4 shillings per pound weight.

According to the well-documented Some Thoughts on the China, Tea and Coffee Trade in the American Colonies During the Colonial Period by Lee Hardluck Humphrey (originally published in Muzzleloader July-August 1997)-

To placate the East India Company, in 1767, parliament eliminated the 25% ad velorum tax on tea to be exported to the colonies. But, in 1768, they passed the Townshend Act placing a three pence per pound duty to be paid at the port of entry. Taking advantage of this, English merchants shipped a record 868,792 pounds of tea to American ports. At Boston it sold for a heretofore unheard of price of 1 shilling 9 pence per pound (Labree 333). This caused an unprecedented upsurge in tea consumption.

This gives us a 3 pence per pound duty imposed by the Townshend Act. Further research led me to an article in The American Historical Review by Max Farrand entitled The Taxation of Tea, 1767-1773. It refers to the repealed tax being 1 shilling per pound of weight and concludes with the following-

With the explanation that has been given the subsequent acts of Parliament on this subject which are otherwise very confusing seem simple enough. The concessions which were granted by the Townshend Acts did not accomplish as much as was expected of them. Though the company’s sales of tea were nearly doubled(1) they found themselves obliged to pay over 15,000 for the first four years of the experiment(2). Accordingly in 1772 when the act of 1767 was about to expire Parliament passed another act this time granting a drawback of three fifths of the import duties on tea exported to America without requiring the East India Company to make any indemnity therefor(3). And the following year 1773 when this was found to be insufficient to induce the Americans to purchase tea the drawback was increased to cover all of the duties paid on importation and permission was given to the commissioners of the treasury to grant licenses to the East India Company itself to export tea to America without having put it up for sale at their warehouses(4). The company could of course sell the tea at a much lower price than could be afforded by particular merchants who purchased it in England, so that in 1773, instead of tea being sold in America nine pence per pound cheaper than in England, if the East India Company had been able to offer for sale the tea imported under this act they could have sold it at a mere fraction of the price obtained in England.

  1. Macpherson loc cit pp 194 416
  2. See Act of 12 Geo 3 c 7
  3. Act of 12 Geo c 60 The drawback of three fifths referred to in Bancroft History of the United States Author’s Last Revision V 438 439
  4. Act of 13 Geo 3 c 44

Additionally, Garth Clark wrote in The Artful Teapot-

The cost was not onerous – two pennies on the English pound [~0.8%] – but the symbolism of taxation without representation caused great anger. To make matters worse, the East India Trading Company was facing trading problems. Its warehouses were packed to overflowing with seventeen million pounds of unsold tea and smugglers still kept forcing the prices down. Sales in Britain were further hampered by the hated tea tax – one shilling per pound on tea imported by the East India Trading Company and two shillings for other importers.

The solution for this problem of oversupply was the misguided Tea Act of 1773, which gave the Company a monopoly on the sale and direct distribution of tea in the colonies. This meant that it would ruin the commerce of middlemen and and merchants in the colonies who imported and distributed tea. American colonists considered this a usurpation of their right to regulate their own commerce and their outrage had a galvanizing impact. In the words of Sir Winston Churchill: “The Act succeeded where the [Samuel] Adams had failed; it united colonial opinion against Britain.”

As you can see, there is quite a bit of confusion and conflicting information over just what taxes were being paid on tea, and by whom. But what is clear is that what enraged the Sons of Liberty and galvanized them into action was not the application of yet another unfair and burdensome tax, but the market protections provided to the East India Company which would allow them to undersell their foreign competitors. Colonists who were attempting to withhold as much income from England as possible were then forced with a difficult decision. Purchase their tea from a non-British company and pay taxes to the crown, or keep more money in their pockets by supporting a company they felt was harmful to the society they were trying to build. It’s actually analogous to Wal-Mart being able to offer lower prices then local competitors because of the tax breaks frequently given to these big box stores by local governments.

This assertion is further elaborated upon by Ian of the Straight Dope Science Advisory Board who wrote-

I mean, one man you never wanted to get in a pissing contest with was Ben Franklin. However, what Ben and company were fighting over wasn’t the amount of the taxes, which, as we’ll see, was actually quite small, but the right of the crown to impose taxes in the colonies at all. “No taxation without representation” was the colonial motto, and the necessity of a government “deriving their just powers from the consent of the governed” was the real sticking point of the whole revolution thing.

Before 1763, Americans were the least taxed citizens in the western world. Colonial subjects were taxed, on average, a total of about one shilling per head per year. … In Britain, the tax amount worked out to about 26 shillings per year …. So the American colonists, for all their bitching and moaning, were actually taxed at a much lower rate than their cousins who’d stayed in the old country. Still, as I say, it was the principle of the thing.

[...]

The duty from tea was three pence … per pound of tea. Tea prices subsequently dropped sharply because the Tea Act of 1773 enabled the British East India Company to export tea directly to America, avoiding the process of selling to wholesalers in England, who would then export it to the colonies. Win-win for everybody except American merchants, who were taken out of the lucrative tea loop by the establishment of this virtual monopoly, and this all came to a head in Boston in December 1773. Hopefully, you know what happened after that.

All in all, the fuss was really not about the amount of the taxes involved. The Stamp Act was never enforced, but it was remarkably progressive in taxing more for items more likely to be purchased by richer buyers. The Sugar Act was actually a tax cut, and the Tea Act was all that remained after the elimination of a lot of other taxes. Economically, it can be said that what led to the American Revolution was actually an attempt to balance a budget while at the same time cutting taxes.

Like any group of oppressed people the Tea Act of 1773 was, in reality, only a small part of their overall frustration. It was simply the tyrannical straw that broke the colonists back to horribly mangle a metaphor. However, to directly address Sara’s question (at last), the only contemporary price I was able to find for tea at the time was six shillings a pound (from Arthur M. Schlesinger’s The Colonial Merchants and the American Revolution 1763-1776). So, depending on which tax you’re referring to (and depending on when “pound” is referring to weight as opposed to the amount of currency) the colonists were paying a tea tax of between 0.8% (3 pence per pound) and 66% (4 shillings per pound). Clear as mud?

Further reading-

More Boston Tea Party items-


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Part of the Boston Tea Party Series - Previous in series        

The Complete Boston Tea Party Series-

  1. First Hand Account of The Boston Tea Party
  2. Research Into The Amount Of Tea Tax Inspiring Boston Tea Party

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5,409 Comments

  1. Sara DiNicola on 17.12.2007 at 19:41 (Reply)

    Aahz,

    Thanks alot!…That was very interesting….Obviously, “lawyer-speak” has been around a good long while…..Anyway, I guess no matter WHAT the intolerable tax was, our nowaday taxes that take us 6 mos. to pay, don’t seem intolerable enough to too many people.

    How to UN-brainwash the people is the key….they’ve got to be reassured they could actually take care of themselves….At this point, they’d rather give half their money to the gov’t., and wait for the gov’t to give SOME of it back to them….Like THAT’S less scary than being held self-accountable.

    Sara

    1. Aahz on 17.12.2007 at 19:51 (Reply)

      Glad you found it interesting! It was a fun bit of research and the perfect thing to take my mind off the kid problem for a few hours today.

      UN-brainwashing is definetly the key. That’s one of the main ideas behind this blog – to get people to think a little differently and come to their own conclusions.

  2. Mikey Stevenson on 17.03.2008 at 08:56 (Reply)

    post old flag pictures

  3. mAximo on 25.09.2008 at 05:02 (Reply)

    The Tea Tax was not an ‘ad valorem’ tax, nor a sales tax.
    Instead it was a tax by weight, and a wholesale tax.
    It was 3d per pound avoirdupois, not sterling.
    A pound of tea from the wholesaler sold for 1s 9d, or 21d, according to Labree.
    If there had been no duty, it probably would have sold for 18d.
    Therefore, the tax was 16 & 2/3 percent on the net value to the wholesaler

    Also, your “4s per pound weight” should say ‘sterling’.
    A shilling is the British nickel, so 4s was owed for every 20s in sales.
    The wholesaler thus netted 16s for every pound sterling on its books.
    Therefore, the tax was 25% on the net value, the same amount Humphrey reports.

    Thus, a 25% tax was reduced to a 16% duty for the equivalent wholesale value of a pound of tea.

    Such a reduction was not large enough to outweigh giving a Crown corporation yet more
    corporate welfare, which is what really got the colonial merchant class upset.
    Great Wal-mart is the modern version: the gov’t built a private freight airport in Arkansas,
    at taxpayer expense, to lower the cost of airfreighting goods built in China. Sam Walton is a
    CIA subcontracter. I heard that Target is similar. Anyway, Wal-mart is an example of ‘gook to
    spook economics’ in practice in order to export our inflation, jobs, pollution and debt
    abroad, while importing child labor, unemployment, etc.

    At least you realised the problems in interpreting ‘pound’ and so calculated the lower &
    upper limits on the tax rate. As usual the true answer lies between the extremes.

    1. Aahz on 26.09.2008 at 08:36 (Reply)

      @mAximo:
      Thanx for the info/clarification mAximo! As I wrote, I really don’t know nearly as much about the events as my schooling led me to believe. With the popularity of this post over the last year I should probably schedule another followup for the next anniversary.

      1. mAximo on 28.09.2008 at 02:56 (Reply)

        your welcome, Aahz.
        2B more clear: a shilling then was 1/20 of a pound, like our nickel is 1/20 of a dollar.
        However, it was 12 old pence (d) to a shilling then, not as today: 5 new pence (p) per pound.
        I should have said: Your “4s per pound weight” only applied to Britain, not the colonies, where the consumer wouldn’t know how much they were paying in tax, since it was an indirect tax, i.e. paid by the source of the taxable item.
        Being an indirect tax, even the tea merchants wouldn’t see how much the tax was, since it was paid by their source: the E.India Co.
        So the Tea Partiers dressed up as Indians must have been merchants protesting the corporate welfare.
        Check out my web article on how income tax was intended by the 16th Amendment to be indirect, and still is so in Puerto Rico where only sources of income must pay income tax.
        Congress continues to implement income tax there as intended in order to make amends for Smoot-Hawley protectionist tariffs in the Depression, which was a violation of Art.I Sec.8 requiring all Excises to be uniform throughout the US.
        PR had already been incorporated as a part of the US during WWI, in order to make everyone born there citizens, and so make the draft legal there.
        Thus, it was subject to US minimum wage laws, which meant that PR cigars could no longer compete with Cuban ones abroad.
        After PR had to pay import tariffs to the mainland, it meant that Cuba could then undersell its cigars.
        Needless to say, the PR tobacco industry was destroyed, which was a primary factor leading to many revolts eventually culminating in the Palm Sunday PoncE Massacre.
        History is now being reversed by trying to right a wrong to PR via a wrong to Mainland employees, who also shouldn’t pay income tax.
        On irs.gov there was a copy of the pre-WWII 1040, which was virtually identical to the current federal 1040 for PR.
        check it out. In effect, the Mainland working class is having to pay for today’s “Crown Corporations”.

        1. mAximo on 28.09.2008 at 03:16 (Reply)

          Oops, I meant it became 5p per shilling, not pound.
          And that Cuban cigars were able to undercut PR ones on the Mainland after Smoot-Hawley was passed.
          My web article takes a hardline approach on grammar, since we should be a nation of laws, and not of Congressional intent, and then of Supreme Court mind reading of their intent, esp. when they can’t agree on what the intent was.
          Congress did intend a 1040 to derive income tax from sources of income, but it worded the 16th amendment to make derived sources liable for income taxes, rather than to derive the taxes from the source.

  4. The_Anti_Guru (Tim Owensby) on 28.02.2009 at 02:56

    @peterkay At that time, income was not taxed, consumption was. The tax rate is debated: http://tinyurl.com/8sf8ev #teaparty #tcot #topprog

  5. txvoodoo (txvoodoo) on 28.02.2009 at 04:11

    @peterkay FYI, here’s some research into the tax #s – it’s not percentages, but informative: http://tinyurl.com/8sf8ev

  6. robbie on 21.05.2009 at 08:33 (Reply)

    it’s amazing that a mere tea tax can trigger a revolution to free US from European imperialism

    Can you imagine if americans at the time are forced to plant tea, not paid for the work, the tea was taken away by british without any payment.

    well that’s what happen in many asia and african communities at the same century under European imperialists

  7. Jenna on 27.05.2010 at 15:21 (Reply)

    3% does not sound right at all…
    .-= Jenna´s last blog ..Anne Klein Coats =-.

  8. Dan on 26.11.2010 at 17:16 (Reply)

    The answer is 12%.
    The amount of the tax was 3 pence per pound weight.
    The price of the tea went down to around 25 pence (2 shillings, 1 pence) after the India Tea company was given the right to re-export the tea to consignors in the colonies. Thus, 3/25 is 12%. (About what sales tax is in NY City.)

  9. craig on 01.03.2011 at 16:08 (Reply)

    I am going to look into the income tax in Britain to find out if it is any more legal here than in america but thanks for the info and hopefully one day britain can have it’s own tea party movement

  10. Tea Party Day on 28.11.2011 at 21:30 (Reply)

    This is great information. I didn’t realize the Sons of Liberty initiated the Boston Tea Party, nor the circumstances involved around the East India Trading Company. So much for public education. :)

  11. Michael Smith on 02.02.2013 at 16:25 (Reply)

    at a tax of 2 shilling 6 pence = 30 pence/lb of tea

    But tea cost w/o tax was 18 pence/lb of tea

    So the tax rate was 166% Which was punitive, but designed to prevent the East India Tea Company from going broke.

    Ben Franklin asked for a tax of 3 pence/lb but this tax rate was refused. This was a 16.7% tax rate which was reasonable.

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