W. Marc Gilfillan, CPA, NC, individual and business CPA and Tax expert, shares about the history of taxes…
“Slavery - the one cause of the Civil War.” - John Stuart Mill, 1862
Can there be any doubt concerning it? Of course the American Civil War was about slavery… was it not? Well actually, one of the most popular myths in our history is that the Civil War was started over the slavery issue and that Lincoln, the Great Emancipator, started a bloody war to sever the claims of bondage that shackled over 3 million black Americans. Just prior to the war, the South had everything its way.
In 1860, the South controlled the Supreme Court and Lincoln and Congress were beginning the process of passing a constitutional amendment to keep slavery forever! What happened?
Let’s rewind the time back to the year 1832. By that year the national debt left from the War of 1812 had been re-paid and Southerners did not see a need to keep up the high import taxes that seemed to only raise price tags for Southern consumers. Either the South had to pay high import taxes on foreign goods or it purchased Northern manufactured goods at terribly overpriced prices. In either case, the South’s money ended up in the North. To say the least, the South was not happy with this arrangement. If you’re feeling the pressure with today’s taxes, call a CPA for Tax Preparation in Raleigh, NC for all your tax-related needs!
Consequently, in 1832 a convention was hosted in South Carolina to get rid of these federal import taxes. The South decided the tax was unconstitutional and authorized the governor to resist the enforcement of the import taxes instituted by the federal government. It looked like a civil war was in the making. Cool heads won over, however, and the Great Compromise of 1833 lowered import taxes over the subsequent several years to an area the South would tolerate. Go here if you want help with a modern-day Tax Return in Raleigh, NC.
Over the ensuing years, however, Northern commercial and manufacturing interests bullied into Congress new taxes that once again stressed Southern planters and allowed Northern Manufacturers to become rich once again. In 1850, John C. Calhoun, the South’s greatest exceptional spokesman, gave a speech to Congress. His speech spoke of 3 wrongs done to the South that may cause secession from the Union and war. The first two had to do with fears concerning the erosion of power of the South in general and the states in particular.
The third, and only solid complaint, concerned tax policy. In Calhoun’s eyes, national import taxes was a class legislation against the South. Heavy taxation on the South raised funds that were spent in the North. The center of economic life in the United States was shifting strongly to the North. Calhoun spoke of secession if the taxes weren’t reduced. But what of the slavery issue? Well, during his campaign for the presidency in 1860, Lincoln repeatedly said he wouldn’t do anything about slavery in the South. Truly, the vast majority of Northerners didn’t care much about black men in bondage, just as little as how much they cared about the Indian in the West or impoverished uneducated workers in factories. By and large many black slaves received better treatment and better compassion than their working-class counterparts in the North. Lincoln, in fact, promised Southern plantation-owners that fugitive slaves would be caught. The Congress and subsequently the Supreme Court (Dred Scott decision) continually affirmed that slavery was here to stay.
But, right as Lincoln was elected and Congress came together in 1861, they created more high import tariffs. Slavery wasn’t an problem - higher import taxes were. In his inaugural address Lincoln stated he would go get the customs in the South even if there happened to be a secession!
Fort Sumter, near the beginning of the Charleston Harbor, started to fill with Union soldiers to enforce the collection of the new taxes. The Civil War started in 1861 when South Carolinians fired on the federal garrison at Fort Sumter. The inevitable had been brewing for decades - but it was not over the slaves. It was over tax policy.
2 years later, Lincoln issued the Emancipation Proclamation, and then only after several military defeats, as the last resort to rally the North to a worthwhile cause. To address the slave issue - most Northerners didn’t care much concerning black people in bondage, any more than they thought about Native-Americans in the west or poor uneducated workers in the factories. Ironically, many black slaves got better treatment and greater compassion than their impoverished counterparts in the North.
That’s it for the History of Taxes Series!
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