which part of the colonial government held the power of taxation

which part of the colonial government held the power of taxation?

which part of the colonial government held the power of taxation
which part of the colonial government held the power of taxation

which part of the colonial government held the power of taxation?

Colonial assemblies, which also had their own governors, existed before to the French and Indian War; but, during that conflict, both taxes and governors were appointed by the British crown and were subject to its authority.


The Colonial Origins of Taxation in the United States, 1607–1700

The Colonial Origins of Taxation in the United States, 1607–1700
The Colonial Origins of Taxation in the United States, 1607–1700

A meager ten percent of gross domestic product was eaten up by taxes in the United States at the start of the twentieth century. Even at that level, the quality of living in the American colonies was considered to be rather high. The first few generations of immigrants who settled the American colonies paid only those taxes that were required to provide protection against internal and external enemies, a system of courts and justice, prisons, roads, schools, public buildings, poor relief, and churches in some of the colonies. They also paid only those taxes that were necessary to provide security against internal and external enemies. This took up a little portion of their income—no more than a few percentage points. In addition to this, the early settlers did all in their power to avoid, reduce, and circumvent the very little taxes that were levied. They were only willing to pay greater taxes during times of war, and once the conflict ended, taxes were reduced to their usual low levels. The first settlers in the Americas did not escape Europe in order to avoid paying exorbitant taxes in the New World.

A precursor to the founding of the American colonies

Beginning in the fifteenth century, the prospect of gold, silver, spices, and other goods that could be obtained through trade inspired European explorers to travel to Africa, Asia, and the Americas in search of new territory to explore and claim for their respective sovereigns, as well as lucrative rewards for themselves. An intense land grab was being conducted by the Portuguese, Spanish, French, Dutch, Swedes, and Danes in addition to the English. The Portuguese and Spanish established separate colonies over the majority of Latin America. The French conquered large swaths of Canada as well as many islands in the Caribbean. The Swedes and the Danes had a short occupation of sections of Delaware as well as many islands in the Caribbean. The Dutch also colonized two other groupings of islands in the Caribbean during their short reign in New York. The English, who later became known as the British after their union with Scotland in 1707, founded colonies all along the Atlantic coast, from Newfoundland to South Carolina (they established Georgia in the eighteenth century), as well as Bermuda and a number of islands in the Caribbean. Georgia was founded in the eighteenth century.

The majority of people in the United States are familiar with the history of the first colonial colony, which took place in Jamestown, Virginia, in the year 1607, as well as the Mayflower Compact and the New Plymouth settlement, which took place in the year 1620. The public is less familiar with the subsequent development of the American colonies from the founding of Jamestown and New Plymouth until the opening salvo of the French and Indian Wars in 1754. This is because the public is more familiar with the stories of personalities, religious disputes, immigration from Europe, and the beginnings of slavery. However, the public is less familiar with the subsequent development of the American colonies.

Even while there are a great number of economic studies that have been published about the early colonies, very few of them specifically address taxes. The majority of published works discuss topics related to everyday economic life. Only after the conclusion of the French and Indian Wars and up to the time of the Declaration of Independence did taxation become a primary focus. There is no one book that covers all aspects of taxes throughout the time period of colonial America that exists now. Reviewing colonial taxation in a more complete manner than just the Stamp Acts and the Boston Tea Party is necessary in order to comprehend the phrase “no taxation without representation” as well as the reluctance of Americans to pay taxes.

This is the first piece in a series that will investigate the colonial origins of taxes in the United States. This article examines the first century of taxes in colonial America in the United States. Others will examine the years beginning in 1700 and continuing through the French and Indian Wars as well as the years leading up to the adoption of the Declaration of Independence, the Articles of Confederation, and eventually the Constitution of the United States. These articles, when taken as a whole, will demonstrate the restricted scope and low rates of taxation, the attitude of the colonists to taxation, and the objectives on which public monies were spent between the years 1607 and 1783, which is a span of time that encompasses 176 years.

Founding and expansion of the

American colonies

The creation and expansion of the initial American colonies were a long process.

It took from 1607 to 1630 to attain a total estimated population of 4,646 in six colonies: Maine, New Hampshire, Plymouth, Massachusetts, New York, and Virginia. By 1640, additional colonies had been erected or created in Rhode Island, Connecticut, and Maryland, increasing the colonial population to 26,634. It almost quadrupled to 50,358 by mid-century, with one additional colony formed in Delaware.

During the following three decades, the colonies of Carolina, New Jersey, and Pennsylvania were created. Maine merged with Massachusetts. Total estimated population of the colonies reached 151,507 in 1680. Of them, Negroes numbered 6,971, of which roughly 3,000 were in Virginia.

In the latter two decades of the century, no new colonies were formed. Plymouth united with Massachusetts in 1691. The population of the colonies expanded to 250,888 in 1700, of which Negroes numbered 16,729 (11.2 percent), as slavery supplied labor for tobacco and other crops.

The first American century comprised of coastal, thinly inhabited communities. For reasons of comparison with the mother nation, the population of England in 1607 has been estimated at 4,303,043, growing slowly to 5,026,877 in 1700. During the 1600s, England promoted migration to the colonies to help fend off French aspirations in the new world.

After an initial period of high mortality, the colonists eventually adjusted to their new surroundings. Better economic circumstances and the lack of wars and violent religious conflicts drew thousands of European migrants, freemen and indentured workers both. The colonists had increased quantity and diversity in their food. Low density and scattered communities prevented the spread of infectious illnesses and epidemics. Abundant woodlands offered heating fuel. Infant mortality rates soon dropped below those in Europe. A average colonial family had eight offspring, twice that of England and Europe. By 1700, colonial women commonly survived into their sixties despite dangers of mortality in delivery.

By the mid-1600s, the colonies were swiftly becoming regions of opportunity.

About three-quarters of the colonists were farmers. A typical farm frequently surpassed 100 acres. Farmers generated surpluses of grain that surpassed the yield of tobacco. A colonial adult farmer consumed 150-200 pounds of meat a year; most maize was given to cattle. Farm family complemented agricultural activity with handcraft manufacturing.

Most farmers owned their land. To promote immigration, colonists frequently got free or virtually free land. Land was freely available at reasonable costs, and fresh land was accessible on the border. Many tenants obtained their own land within a brief time of tenancy, a shift in status that was almost unthinkable in Europe. Most immigrants and native-born colonists found abundant chance to purchase property. Upon completing periods of indenture, on average four years in length, slaves sometimes awarded plots of land on which to begin their lives as freemen. Many became prosperous farmers and bought slaves of their own. It has been estimated that from half to two-thirds of all migrants to the colonies arrived as indentured servants, while servants seldom topped a tenth of the colonial population at any one period.

Grants of land were regularly utilized as a source of payment to ministers and other officials, which helped to keep taxes low. In his Wealth of Nations, Adam Smith highlighted abundance of fertile land and liberty as the two primary sources of colonial success.

The remaining colonists were skilled or unskilled craftsmen, day workers, and seafarers who clustered in villages, towns, and port cities. A few became businessmen or major planters. Colonial labourers got 2-3 shillings a day, twice to treble the salaries of their English colleagues. Colonial seafarers also fared well. Desertion from English seamen to service aboard colonial ships was frequent.

The colonies’ monetary resources.

To have a better understanding of the challenges involved in tax collection, a brief discussion on the various methods of payment is necessary. The monetary units used for the public accounting were English sterling, namely pounds (£), shillings (s.), and pence (p) (d.).
Despite this, there were not many sterling coins in circulation across the colonies. The colonies did not have access to a locally sourced supply of gold or silver that could be used to make coins. They obtained most of their coinage from trade with the several Spanish and French colonies that were located in the Americas. As a method of exchange, a broad range of foreign coins were used, the most common of which was the Spanish piece of eight, which was eventually renamed the dollar and went on to become the fundamental unit of the monetary system used in the United States. The colonists were exceptionally skilled at managing a wide variety of coinage, each of which had a distinct worth and weight. About half of the coins were Spanish silver dollars, the majority of which had been struck in Mexico. For the better part of four centuries, the Mexican dollar included a predetermined quantity of silver. Between the years 1601 and 1816, the official exchange rate in England set the value of a troy ounce of silver at 5 shillings and 2 pence, which translated to a value of 4 shillings and 6 pence for a standard Spanish dollar.

During the entire seventeenth century, the American colonies relied on imports for a broad variety of consumer goods. These items came from Europe. The price of imports almost always surpassed the value of the goods that were sent out of the colony. As a direct consequence of this, a significant amount of the currency that was sent to the colonies was sent to England and other European nations in order to pay off the debts incurred by the colonists.

Colonial legislatures did all in their power to preserve specie, since it was believed to play a vital role in easing commercial transactions. They passed laws that artificially inflated the value of the Spanish dollar to the tune of 5s, 6s, and even more in certain cases. However, these safeguards were not successful in preventing the export of coin to England and other European countries. Because of the persistent lack of physical currency, the colonists were forced to devise creative new methods of exchange. They resorted to trading in goods for one another, bartering, and using paper instruments such as private promissory notes and bills of exchange drawn on London merchants as a means of payment.

Any legal tender might be used to satisfy financial obligations such as fines, taxes, and personal debts. The official value of locally produced products (such as wheat, maize, tobacco, and rice) was established by the legislatures of the colonial states. In addition to beaver skins and cattle, wampum and cattle were also legal goods (black shells were valued at double the rate of white). In the town of Hingham, tax payments may be made using milk pails if residents so desired. The exchange of commodities for monetary value was a cumbersome and ineffective process. They first needed to be appraised for tax reasons, then transferred to the government, where they would be kept, conserved, and eventually put up for sale.

The colonists sent the worst of their goods to the colonial treasurers so that they might pay less in taxes. Tobacco was the traditional form of payment for quitrents in Virginia. The auditor-general issued a report in the 1680s stating that “the amount of unmerchantable leaves handed onto collectors was so vast that the income from this source had almost shrunk to nothing.”
In 1686, as a direct result of this revolt, the King of England revoked the act that had granted quitrent payments in tobacco the protection of the law (though it was restored in 1688). Officials in Rhode Island have expressed their frustration at the difficulty of preventing “lean” cattle from being used as a form of tax payment. However, among themselves, the colonists discounted the official value of commodities (the price at which the discount was made became known as “country pay”) to compensate for the costs of storage, shipping, and losses due to deterioration. This was done to make up for any losses due to deterioration. When compared to the commodities that were paid in taxes to colonial governments, those that were traded in private transactions were of superior quality and sold at cheaper costs.

Additionally notable is the fact that the early governments of the American colonies were the first in the Western world to issue paper currency, a distinction that they have to this day. In the year 1690, the Massachusetts Bay Colony became the first colony in the United States to issue official paper currency. (By 1712, there were a total of seven additional colonies) In the autumn of 1690, a military expedition commanded by its governor, Sir William Phipps, set sail for Quebec with the intention of capturing the territory. It was a failure. The colonial authority had the expectation that the troops would be compensated out of the treasure that was taken from the enemy. Upon arriving back home, the troops who had made it through the battle requested immediate payment from the government. Due to the fact that revenues were only received to cover the yearly expenses that were forecasted, the colonial treasury remained empty. The remedy proposed by the legislators was to issue bills to the possessor in the form of “certificates of indebtedness,” which were in effect debt certificates. The colonial treasury would be entitled to the payment of taxes in the form of bills that were payable to it. As long as certain income targets were met, the legislation mandated that a certain proportion of the notes would be redeemed for their face value and retired, or written off.

Colony or Old Charter bills were the names given to the currency that was introduced in 1690. They were printed in denominations of five pounds, ten pounds, twenty pounds, and five pounds, and eventually came to be known as “bills of public credit” or “bills of credit” for short. They justified their issuance by claiming that it was necessary to borrow money for a certain public expenditure. Since none of the colonies had been granted the authority to mint their own currency, the notes were not referred to as money. The inscribing of bills of credit as legal money and acceptable forms of payment for any and all obligations, including taxes and bills of exchange, was permitted. The first offering, which was for the sum of £7,000, was increased to £40,000 exactly one year later.

When first introduced, bills of credit were greeted with skepticism. Soldiers who were the first to get the new notes were only able to trade them in for a maximum of 12–14 shillings to the pound worth of previous types of currency. An statute passed in 1692 by the colony’s governing body, the General Court, affixed a five percent premium in their usage to pay taxes as a means of gaining the people’s trust in them. This was done so that the public would have faith in them (which remained in place until 1720). Because of this policy, bills of credit now have a higher value than other forms of legal tender. By the beginning of 1693, the majority of the banknotes had already been redeemed. The consistent reissuance of bills of credit was a direct result of the widespread demand for their facilitation of trade and the payment of taxes. For over twenty years, bills of credit maintained their parity with physical currency.

The first colonies to be granted charters.

During the first several decades after the colonies of Plymouth, Massachusetts, Maine, New Hampshire, Rhode Island, and Connecticut were established, the immigrants who moved to and/or resettled in those provinces paid very little to no taxes. This was the case because of the low population density. The government of England placed practically no taxes on its citizens. For instance, the charter for the Massachusetts Bay Colony exempted the colony from all royal taxes, subsidies, and customs for seven years, and also exempted the colony from all taxes for 21 years, with the exception of a five percent charge on imports entering England. Only quitrents, which were a kind of land tax originally paid by freemen to the Crown or to the company that held a charter from the Crown, were first collected by the chartered corporations that were responsible for establishing the colonies. A freeman’s claim to his property may be protected by making an annual payment known as the quitrent. This payment, which was made at a predetermined amount of several shillings for each hundred acres of land, was made in place of the services that were usually expected under feudal custom.

The early colonies had a low population density and an even lower level of administrative organization. It was not until sometime in the 1640s that the few officials who had served began to earn their official pay. Their remuneration consisted on the fees collected for the services they provided. These included the distribution of legal documents, the maintenance of records, the arrest and punishment of lawbreakers, and the issuance of licenses. In the early years, expenditure on civic activities and church clergy was funded by donations made voluntarily by members of the community. The presence of an unacceptable number of free riders compelled authorities to institute mandatory contributions. Taxpayers were honored for their donations; for instance, in the town of Dedham, the taxpayers who contributed the most money were given the finest seats in the church.
The very little amounts of money that were collected by colonial administrations were mostly used to build roads, churches, and schools.

In the nineteenth century, a prominent historian by the name of Richard T. Ely wrote that “one of the things against which our forefathers in England and in the American colonies contended was not against oppressive taxation, but against the payment of any taxes at all.” This statement is reflective of the values that were prevalent during that time period (emphasis added).
Those individuals who had the fortitude to endure the arduous journey across the Atlantic and who had successfully tamed a wilderness on their own did not like being required to pay taxes to any authority.

However, they did not take too much time to arrive. Growing populations in the colonies made it necessary to take defensive measures against Indians and other European invaders. Additionally, it was necessary to construct and maintain roads, schools, jails, public buildings, and ports, as well as provide financial assistance for poor relief. The colonists were increasingly subjected to a number of different types of taxes, both direct and indirect. As a result of the power of trade companies to collect assessments on their shareholders, the corporate colonies in New England had the legal authority to impose direct taxes on the people who lived there. This authority allowed them to do so legally.

In the year 1638, the General Court of Massachusetts mandated that all residents of the state, freemen and non-freemen alike, financially contribute to the commonwealth as well as the church. There were two types of direct taxes: (1) a tax on wealth and (2) a poll, sometimes known as a head tax. In certain circumstances, the poll tax developed into or included an income tax.

The wealth tax was calculated using something that was referred to as the nation “rate,” which was essentially the same thing as a property tax. On the worth of raw and developed lands (meadow, plowed, and hoed land), products, stock used in commerce, boats and other vessels, mills, and other visible assets, government officials carried out assessments, or the process occasionally entailed self-assessment subject to scrutiny. The province, the county, and the town or village were the three levels of colonial administration, and each one of them was responsible for compiling an annual list of planned expenditures. A tax rate was applied to the assessments in order to create the necessary revenues in order to maintain these governments. This resulted in a colony rate, a county rate, and a town or village rate. Each of these rates was designed to provide the necessary funds.

The evidence implies that effective tax rates on land and other real assets were less than one percent, despite the fact that the methods of assessment and the rates of tax differed throughout the many colonies that made up New England at the time. Because of the low level of government spending, there was less of a need to levy very high rates. In addition, the colonists attempted to hide their assets and have the property designated as having the least amount of development in order to dodge, avoid, and fight even these low rates of taxation.

In the beginning, the national rate was imposed as a flat amount among the towns in the form of quotas. The towns then assessed and collected taxes in order to satisfy their respective quotas. Several years later, Massachusetts made the changeover to a system of direct taxation of people. In most cases, magistrates and priests were spared from having to pay their respective communities’ rates. The rate varied in Rhode Island from a farthing (a quarter of a penny) to a penny in the pound, which corresponded to a tax rate that ranged from 0.1 percent to 0.4 percent of the assessed value of agriculture and products. The tax rate in Massachusetts was one penny per pound, which corresponded to a percentage equivalent to 0.4 percent.

The poll tax, sometimes known as the head tax, was the second kind of direct tax. The legislation that was passed in Massachusetts in 1646 served as a template for the rest of the New England colonies. An yearly levy of one shilling was needed to be paid by all males who had reached the age of 16 or were older in the year of registration for possible military duty. In order to simplify things from an administrative standpoint, the tax and the nation rate were sometimes merged.

Although the current income tax doesn’t date back to until the Sixteenth Amendment was ratified in 1913, a tax that was very similar to an income tax and was known as a “faculty” tax was implemented very early on in the history of the New England colonies. A statute passed in the Bay Colony of Massachusetts in the year 1634 mandated the evaluation of each individual’s property and the results of his labor. The year 1643 saw the appointment of assessors who were tasked with rating residents based on their estates and their faculties, which included their personal talents. In the next three years, more definition was provided, which described the taxes of “laborers, artificers, and handicraftsmen” on their “returns and profits.”

It is feasible to get a ballpark approximation of the effective tax rates for both the poll and the faculty. In addition to their regular poll tax, artificers who worked during the summer months for a wage of 18 pence are required by the statutes of Massachusetts to pay a faculty tax of three pounds and four pence per year (day laborers, engaged in sporadic work, were exempt). If an artificer put in 78 hours of labor throughout the course of the summer season, which is equivalent to 13 six-day weeks, their average weekly wage would be £5.17. If he made at least as amount in other jobs during the remainder of the year, which was not subject to supplementary income tax, then his yearly income would be somewhere in the vicinity of £12.00. An effective total tax rate of 1.8 percent is applied to the income generated by work if a tax of 4s. 4d. is applied to a yearly income of £12 (the poll tax and the faculty tax). When yearly earnings are higher, the tax rate tends to be lower. If he made £20 in total earnings per year, his overall tax rate would be 1.1 percent of that amount. At that time, public officials were given yearly stipends that ranged anywhere from twenty to fifty pounds. The one shilling rate of the poll tax reflects a rate of 0.4 percent based on an annual income of £12 when considered by itself. The colonies of Connecticut, New Haven, and Rhode Island all adopted the professor tax as part of their own legal systems.

The budgeting process in colonial times was guided by two rules: (1) restricted spending, and (2) maintaining fiscal balance. The amount of the country rate and the poll tax was determined to be just enough to fulfill the yearly requirements, and no more. These criteria seldom call for more than a penny in the pound on property and the basic poll tax. At other times, possibly just a part of the rate will be approved, although at times of Indian struggle, a multiple of the rates and poll tax may be imposed (during King William’s War, near the end of the previous quarter of the century, the tax in Massachusetts reached 16 rates).

Assessments and the collection of taxes started out on a democratic footing from the very beginning. The people who lived in colonial towns were responsible for selecting a freeman from among themselves to serve in the role of commissioner. It was up to him to determine who all of the eligible guys were and to estimate how much their assets were worth. The provincial treasurer received the lists, and then he issued warrants to the town constables instructing them to collect the stipulated amounts of money. The value of the merchants’ shipments served as the foundation for the calculation of their taxes (lest they leave town between the times of assessment and collection). In spite of the low rates, complete payment of taxes was only sometimes guaranteed.

In addition to direct taxes, the New England colonies also had a number of other types of import and export charges (save in Rhode Island). A “tonnage charge” of one shilling per ton was levied by Massachusetts on vessels that were trading in the colony but were not owned by its residents. The revenue from this tax was designated towards the upkeep of the colony’s defenses. In the year 1636, Massachusetts was the first state in New England to implement a system for collecting customs revenue by levying import charges of one-sixth of the ad valorem value on goods such as fruits, spices, sugar, wines, liquors, and tobacco. After that, an ad valorem tax of just two percent was imposed on silver plate, bullion, and other types of commodities in general. Products like as boards, barrel staves, tar, oysters, and iron were all subject to export charges when Plymouth imposed them. Due to the fact that salt is such a vital component in the preservation of codfish, which is a significant export, most charges on salt were waived. The “sins” of drinking and smoking were the primary targets of the indirect taxes, which were relatively low.

On many instances, the colonies of New England resorted to the use of tax exemptions in order to foster the growth of certain businesses. A corporation that was involved in the production of iron received land, a tax exemption for 10 years, and a monopoly from the state of Massachusetts in 1645; by 1648, the firm was producing one ton of iron each day.
In 1665, the state of Connecticut exempted anybody who established a forge from paying taxes for a period of seven years. (Despite the fact that these early firms were unsuccessful, by the time of the American Revolution, the colonists were producing around 30,000 tons of wrought and cast iron per year, which represented one-seventh of the total production of the globe. It is likely that the number of forges and furnaces in the colonies surpassed the total number of those found in England and Wales combined.

It was determined that fishing was of utmost significance. Ships and equipment were exempted from all country rates in Massachusetts for a period of seven years, and ship carpenters, millers, and fisherman were not required to participate in military training. Both the cod fish industry and shipping were major contributors to New England’s economic prosperity.

Those proprietary colonies that came later

The public revenue of a colony belonged to the private proprietor of a proprietary colony, in contrast to the common shareholders of a chartered corporation and the freemen who subsequently became residents of a chartered colony. This was one of the key differences between a chartered colony and a proprietary colony. New York, also known as New Netherlands when it was under Dutch administration, Maryland, New Jersey, Pennsylvania, and Carolina were all part of the proprietary colonies (which formally separated into North and South Carolina in 1712).

Royal grants to proprietors constituted title to real land that could be subdivided, sold, mortgaged, leased, placed in trust, and split among heirs. In addition, royal grants might be used as collateral for loans. The owner of the estate was a landlord, but he was not a feudal lord even if he owned the property. He needed the permission of his tenants in order to rule and collect taxes. Because property that was not inhabited did not provide any money, he advertised for new settlers and offered them favorable conditions.

There were two different kinds of incentives. The most typical form was the donation of land. Each free married man who paid Lord Baltimore £20 for his transportation to Maryland was offered a contract that provided 100 acres of land, with additional allotments for his wife, adult indentured servants (hereafter referred to as servants), and children. This contract was offered by Lord Baltimore. Any person who moved at least five extra people to the state of Maryland was given an additional 1,000 to 2,000 acres. The conditions that were provided by the owners of Pennsylvania, New Jersey, and Carolina were quite similar. Any settler who was able to pay an initial quitrent was awarded 200 acres by William Penn. In addition, the settler received an extra 50 acres for each servant he brought over. However, the recipient was obligated to develop his property within three years or the owner may take it back. Land that has not been developed does not provide any revenue.

This strategy proved to be successful for Lord Baltimore. His domain had a population of 30,000 people towards the end of the seventeenth century. The plantations that were situated along the lower Potomac and the Chesapeake Bay were producing 50,000 hogsheads of tobacco each year. A hogshead is equal to 63 imperial gallons, therefore this quantity of tobacco had a market value of around £100,000 at the time. The owner made a profit of £12,000 thanks to the tax he placed on tobacco, the fees charged by the port, the quitrents of 2 shillings per hundred acres of land, and the expenses charged for the creation of legal papers. After paying his officials and other expenditures, he was left with a profit of $5,000, which was a significant amount at the time.

In addition, tax breaks were offered to entice people to move there. During the first ten years of their settlement in New Netherlands, free settlers were spared from paying taxes and customs. The owners in Carolina pushed their immigrants to produce wines, silks, olives, and other semitropical goods, and in exchange, England exempted these goods from having to pay customs charges for a period of seven years.

Each owner needed a system of territorial administration in order to benefit from the growth of his colony, collect quitrents and penalties, and reclaim property from settlers who did not have successors or who did not fulfill the conditions of their contracts.

The proprietory colonies were responsible for maintaining law and order, supplying their own means of defense, and constructing and upkeeping infrastructure like as roads, jails, public buildings, and fortifications. The proprietors were given permission to levy taxes on the people under their control. Direct taxes were those that were permitted by legislation that were adopted in colonial legislatures. These taxes often comprised a general property tax, which was paired with the poll tax, and in certain cases, a direct land tax. In some of the colonies, the age at which individuals were required to pay the poll tax was 16, while in others it was 14. Excises, tariffs imposed on imports and exports, and tonnage taxes were all examples of indirect taxes.

In New Netherlands, the tithe was the most important kind of direct taxation. The tithe was a levy on land that was equal to one tenth of the yearly crop after an initial exemption of ten years. Little income was collected since there were so few towns and they were so far apart. An early example of an earmarked tax was the chimney tax that the city of New Amsterdam implemented in 1657 in order to support the establishment of a fire patrol. Only a tiny portion of the colonists in New York were required to pay a property tax when the Duke of York acquired control of the territory from the Dutch. In New York City in the year 1676, just 302 inhabitants out of a total population of 2,200 were reported as being subject to taxes. A very tiny subset of the population was responsible for paying the rate, which was equal to a penny in the pound (0.4 percent) on real estate and personal valuables.

Tax rates were graduated based on a person’s wealth. At the end of the seventeenth century, citizens of Pennsylvania were free from the tax if the combined value of their real estate and personal possessions was less than £30. A reduced poll tax of 6 shillings was levied on adult men with an annual income of less than £72. Even at these low rates, the farmers fought back vehemently since they continually undervalued their land while at the same time overvaluing their crop, which served as the method of payment. In the year 1688, the colonial governor of Additional York issued a warning to the English Crown that any efforts to increase the effectiveness of tax collection or to levy new taxes would result in the migration of his people to other colonies.

Import tariffs and excises were something that early New Yorkers had to pay as well. Following the English conquest of New York in 1664, English taxes were instituted. A 10% excise tax was placed on alcoholic beverages. The imposition of ad valorem tariffs on all other types of imported commodities occurred in stages, with England’s exports receiving preferential treatment throughout the process. The sales tax on non-English items was set at 8%, while the sales tax on English goods was set at 5%. The export charges on peltries were 10.5 percent, while the export duties on tobacco were 2d. per pound, and they were to be paid in beaver and wampum. In 1674, the percentage of duty that was charged on English goods was lowered to 2%.

The state’s taxpayers were not amused in the least. The customs rates will remain in place for the next three years. When the customs law that had been in effect since 1677 was not renewed in 1680, numerous colonists apprehended the collector of customs as he attempted to execute the now-defunct legislation. They put him on trial in the local courts, where he received a conviction, and then they sent him back to England as a prisoner (where he was subsequently exonerated). After receiving New York from the English monarch in 1664, the Duke of York began to pay more attention to the grievances of the people who were under his authority. The colonial administrations of Maryland and South Carolina levied very low customs taxes on imports and exports, and there is no record of customs duties being collected in New Jersey prior to 1702.

The actions of public officials in proprietary colonies were primarily reliant on fees, which were governed by colonial legislatures. These fees were collected in many forms. Nearly from the start, proprietors and their administrative officers in all of the proprietary colonies, with the exception of New York, were reliant on yearly appropriations from their legislatures, which established particular rates of customs and direct taxes. New York was the only exception to this rule. The English precedent, which established Parliamentary control over appropriations, was echoed in the ability of colony legislatures to appropriate taxes. By not contributing to the government, freemen taxpayers in the colonies had a significant amount of influence over the goals and actions pursued by owners and the executive authorities of those proprietors.

The first royal American colony, Virginia was established in 1607.

In the seventeenth century, the situation of Virginia is unique since it was one of the first examples of a royal colony. On April 10, 1606, King James I of England granted two Virginia companies a charter and all of the territory between 34 and 45 degrees north, with an inland extension of 100 miles. This area was part of the Virginia Colony. The charters stipulated the establishment of regional councils within each colony, each of which was accountable to a central governing body based in England. The charter stipulated that the colonists were to be granted the same freedoms, privileges, and immunities as those who were born and raised in England.

On December 20, 1606, an expedition from one of the two companies sailed out from London, and on May 13, 1607, they established permanent settlements on the Jamestown peninsula. It was revealed that the names of the colony’s future administrators were contained inside a box that had been hermetically sealed. The list reads like a Who’s Who of notable figures from early American history. The early years were marked by a great deal of adversity. As late as 1616, the population of the colony was just 351, which was not much of a return on investment after a decade of labor and expense.

The year 1619 saw the beginning of a transition in the administration of the Virginia colony, which was precipitated by the entrance of a new governor. His orders called for the creation of a general assembly that would be composed of executive councilors selected by him and a House of Burgesses elected by all of the male colonists. In addition to the 22 Burgesses that were elected, he selected 6 councilors.

The colony did not continue to have any success with luck. On March 22, 1622, formerly peaceful Native Americans killed 350 colonists in a massacre. In addition to preventing fast population expansion, an epidemic of malaria and other illnesses that struck freshly arrived colonists slowed down the rate of population increase. As if things couldn’t get much worse, the Virginia Company came dangerously close to declaring bankruptcy. Despite the fact that they had never been paid any dividends, shareholders argued with one another. In July of 1623, the Privy Council in England made the decision to temporarily take control over the colony. It was suggested that the colony should be brought under the authority of the monarch and that the original charter should be revoked. In May of 1624, the highest court in England declared the charter invalid, dissolved the company, and established the first royal colony in what is now the United States. At the beginning of its time as a royal colony, Virginia had fewer than 1,500 people living there. Taxpaying colonists were pitted against the Crown and its governors as they struggled to find a solution to the persistent issue of how to pay for the expenses of royal colonial government.

Before the year 1625, any planter or adventurer who arrived in the new world at his own expense and remained there for three years was awarded 100 acres of land that was exempt from quitrents. Those who arrived at a later time were required to pay a quitrent of two shillings for each hundred acres. The failure of a landowner to make payments for a number of years gave the Crown the right to reclaim the land. In the beginning, quitrents were supposed to be paid in actual currency. However, due to a lack of coin at the time, the Virginia Assembly decided in 1645 to allow payment in tobacco at a rate of 3 pence per pound. In 1661, the rate was decreased to 2 pence per pound to reflect the lower price that tobacco was selling for on the market. It was reported in 1686 that the majority of the tobacco that had been received in payment for the quitrent was unable to be sold, which prompted the Crown to take direct action and demand that the quitrent be paid in coin. Following the successful completion of the Glorious Revolution in 1688, the payment of quitrent in tobacco was reinstituted at the rate of one penny per pound. Throughout the course of the century, quitrent payments were routinely evaded, and for all intents and purposes, the payment of quitrent by landowners became a voluntary transaction.

The colony’s government needed to generate its own revenue in order to perform even the most fundamental of public duties. As a result of this, the legislature of Virginia approved a poll tax that would apply to Caucasian men aged 16 and older. The head of the household, as well as the owner of any slaves, was responsible for paying the poll tax for any slaves or native American servants aged 16 or older, regardless of gender. In 1645, the poll tax was temporarily abolished because it was believed to have a disproportionately negative impact on the more economically disadvantaged members of the community. It was changed to a tax on livestock, with the following rates: 32 pounds of tobacco for each horse, mare, or gelding; 4 pounds of tobacco for each breeding sheep; 2 pounds of tobacco for each breeding goat; and 4 pounds of tobacco for each cow that is at least three years old. However, the tax on livestock was only in effect for a short period of time. The legislature found out in 1648 that it was inhibiting the growth of animal husbandry, so they decided to repeal the law and make it illegal.

There were periods of time when tax breaks were offered in order to encourage diversification away from a heavy reliance on tobacco. In 1664, in order to encourage the production of hemp, pitch, and tar, the English government exempted these commodities from the payment of English import duties for a period of five years. This exemption was in place until 1669.

In 1660, the Virginia Assembly imposed a tax of 10 shillings per hogshead of tobacco that was exported in ships that were not required to deliver their cargo to English dominions in Europe. This tax was intended to encourage the development of locally owned shipping and was paid by ships that were not required to deliver their cargo. In order to encourage shipowners and mariners to relocate to Virginia, the state declared that Virginia-owned vessels were exempt from certain regulations. New Englanders continued to control the majority of the shipping industry.

Slaves, servants, wine, gunpowder, and shot were all subject to import duties, and a tax of 2 shillings was placed on each hogshead of tobacco that was exported from the country. The operation costs of William and Mary College were covered by revenue from an export tax on furs. The majority of colonial officials relied on fees rather than official salaries to cover their financial obligations.

It was common practice to avoid paying taxes on tobacco. Shipowners frequently facilitated the smuggling of tobacco onto their vessels. Others made arrangements to transport the tobacco in hogsheads rather than in bulk quantities. Because of bulk packaging, the number of ships needed to transport tobacco was cut by one-sixth, which resulted in the colony losing port duties and business. The political power of the planters was reflected by a law that was passed in 1696 that increased the size of a hogshead by one-fifth. As a result, the revenue generated from the export of hogsheads was reduced even further.

The Virginia legislature was responsible for determining the governor’s salary and other expenses on an annual basis for the majority of the seventeenth century. In the year 1680, the governor was looking for a source of revenue that was separate from the legislature, so he threatened to raise quitrents and ensure that they were collected. In return for him backing down from his threat, the legislative body substituted a permanent export duty of 2 shillings per hogshead of tobacco for the annual appropriations that had been given to him in the past. Even though a significant portion of the tax was avoided, he was still able to generate sufficient revenue to cover his annual salary and executive expenses. Other colonial legislatures, such as those in Massachusetts and New York, never gave their governors permanent sources of revenue. As a result, the taxpayers in those states had greater control over the executive branch of government. In the eighteenth century, many of the other royal colonies looked to Virginia as a model for how an independent executive government should operate financially.


The fact that Delaware was ruled by both the Dutch and the Swedish before being annexed by England in 1664 makes the state interesting to study. In March of 1638, a Swedish limited liability company founded what is now the state of Delaware as the first permanent European settlement in what is now the United States. William Usselinx, who was the driving force behind the establishment of the New Sweden Company, was the recipient of a charter from King Gustavus Adolphus that was valid for a period of twelve years. The Swedish government granted the corporation a monopoly over commercial activity between Sweden and the New World. The charter established a tax of four percent on imports and exports, with the Swedish government entitled to collect ten percent of all agricultural production and one fifth of all ores. Settlers were supposed to enjoy a tax exemption during the first ten years of their residency, after which they would be required to pay a five percent levy on imports and exports to fund the local administration.

The business sent 33 military personnel and three civilians to the colony to help with administration and security. An excise charge placed on tobacco that was brought into Sweden from the Netherlands was used to cover the early expenditures (not from the colony). The majority of the settlers engaged in the cultivation of tobacco since it was free from taxation. Import charges on liquor and other goods as well as an export tax on furs were the only sources of revenue used to cover the 4,404 rixdalers in annual government costs that were incurred in the last year that Sweden was in control of the territory.

In the year 1655, the Dutch West India Company seized control of the province. The charges were placed on imported liquor, beer, and wine by the vice director of the organization, as well as a minor fee of 12 stivers (about 25 current U.S. cents) every morgen (2 acres) of land. The colony was a bad investment from a financial standpoint.
The corporation suffered financial losses and went into debt to the city of Amsterdam, to whom it eventually handed up half of the colony in 1656 and the remaining territory in 1663. It was promised to the settlers that they would be free from direct taxes for the first ten years of their settlement, and that after that, they would pay taxes that were no greater than the lowest in New Netherlands. They were also excused from paying tithes for a period of twenty years.

Between the years 1664 and 1682, the Duke of York served as Governor of Delaware on behalf of the English Crown. Its first English administrator maintained the previously established method of taxes and placed a general tariff of ten percent on all imports and exports throughout his tenure. In the year 1673, the governor of New York also assumed the role of governor of the Delaware colony. His effort to impose a penny in the pound tax on estates was unsuccessful because of the great distances involved and the undervaluation of the estates. In addition to this challenge, his efforts to collect poll taxes were unsuccessful. Those who did not pay the mandatory labor contributions were subject to fines, however the penalties were almost never enforced and collected.

Between the years 1682 to the end of the century, Delaware was a part of a legislative union with Pennsylvania. William Penn served as the owner of both states during this time. According to the terms of his charter, Penn was only authorized to levy taxes with the advise and approval of the freemen living in the colony.

Penn offered property for sale for the ridiculously cheap price of a down payment of ten pence per acre, with a quitrent of one-fourth of a cent per acre. Those Europeans who desired to flee religious persecution in their homelands settled in the three lower colonies of Delaware, which later constituted a portion of Penn’s original gift from Charles II. The Assembly and Executive Council of Pennsylvania-Delaware financed public services with fines, a tax of a penny per ton on all vessels over 12 tons, and duties of 2 pence per gallon on strong liquor and 1 percent ad valorem on all other goods. In addition, the Assembly and Executive Council of Pennsylvania-Delaware imposed a tax of a penny per ton on all vessels under 12 tons. In order to finance transportation infrastructure like roads, bridges, and ferries, counties were given the authority to impose direct property and poll taxes. Few schools received financial assistance from the government (yet colonists were subject to fines if children could not read and write by the age of 12).

On many occasions, the queen made a demand that inhabitants of Pennsylvania and Delaware donate both troops and money to the military operations against the Indians in New York. A variety of taxes were given the green light for implementation, one of which was a charge of one penny per pound on any and all property (both real and personal), with the exception of those whose net estates were less than thirty pounds. Freemen with a rating of less than £100 were required to pay a poll tax of 6 shillings. Taxpayers in Pennsylvania and Delaware have never satisfactorily fulfilled the queen’s demands. In the year 1701, a request to contribute 350 pounds for the construction of a fort above Albany was categorically denied.

control exercised by the English empire

Both covert and overt levies of taxation were levied by the English authority onto its American colonies. The Navigation Acts, which intended to govern shipping between the colonies and its commercial partners, were a kind of implicit taxation that was implemented at the time. The customs charges that were levied on goods leaving the colonies for England and other countries, as well as the customs duties that were paid on goods entering England from other countries, constituted the explicit taxes. Even while these levies were relatively low for the whole of the seventeenth century, there was a consistent pattern of dodging the charges on exports.

In October of 1621, authorities from the Crown of England issued an edict that forced American colony planters to transport all of their goods to England. This mandate was in effect for the whole year. The purpose of this edict was to guarantee that the Crown would be paid its customs money, which is an important source of royal revenue that does not need consent from parliament. In the years 1627, 1631, 1633, and 1639, similar directives were given to royal administrators of Virginia. In the year 1642, Lord Baltimore in Maryland was given a similar set of instructions. The instructions that were given to the governor of Virginia in 1642 required that every ship loaded with tobacco or other commodities must post bond to guarantee that the products would be transported to English destinations. Additionally, the instructions mandated that each captain must have a bill of lading on which customs and other duties could be levied upon the ship’s arrival in England. These instructions were included in paragraph 30 of the instructions that were given to Sir William Berkeley. Further instructions were given to him in paragraph 31 to restrict commerce to only include ships owned by the English. In the event that an emergency demanded the use of a foreign ship, the ship’s captain and owner would first have to post a bond to guarantee that their vessel would sail to England and pay the appropriate duties. Keep your eye on the cash.

These royal orders came before the Navigation Acts and served as their forerunners. In the year 1651, Parliament approved the very first Navigation Act. It established that in order for the products from the American colonies (as well as those from Africa and Asia) to be brought to England, Ireland, or any other English property, the ships must be owned by the English and their crews must be mostly composed of English sailors. For the purposes of the statute, anyone who lived in what is now the United States were considered to be English. Only commodities that originated in the same foreign nation might be transported into English areas by ships from other countries. The act reflected the economic doctrine of mercantilism, which is a theory that is based on a national policy of ensuring a favorable balance of trade, accumulating bullion, establishing colonies and a merchant marine to supply the mother country with vital raw materials and other goods, and developing industry in the mother country. Mercantilism is a theory that has been around for a long time. The measure was also meant to undermine Dutch shipping, which was one of England’s primary competitors at the time.

In May of 1660, after the Stuart Restoration, a statute that had been passed in 1651 was reenacted and its scope was expanded. It barred the participation of any foreign ships in English colonial commerce. It was required that any vessels engaged in commerce between England and her foreign colonies be owned by English citizens, commanded by Englishmen, and have at least three-quarters of their crew comprised of English speakers (or colonists). A number of amendments were made to the act, one of which declared that certain named colonial goods, including as sugar, tobacco, cotton-wool, indigoes, ginger, and certain dying woods, may only be exported to England. This included specific dying woods. The purpose of the Navigation Acts was to stop the colonies from building their own businesses that may compete with those in England and from exporting their goods to England’s competitors, particularly the French and the Spanish.

The Staple Act of 1663 was the next piece of legislation that was passed, and it opened the door for untaxed commodities to be carried aboard English ships from the colonies to ports in other countries. However, any foreign goods brought on board that were intended for the colonies were required to first be sent to England. The products had to be unloaded there, the duties had to be paid, and then the cargo could be loaded up again to be sent.

The Navigation Acts were passed into law in order to provide guidelines for commercial interactions between England and her foreign possessions. However, they neglected to take into consideration the expansion of duty-free trade between the colonies, which contributed to the rise of intercolonial commerce. Colonists were able to sell goods to one another at prices lower than those available to inhabitants of England, who were required to pay customs charges on all imports. A great number of shippers from New England reportedly gathered up tobacco in Virginia in order to transfer it to other sister colonies. Despite this, New England ships often traded tobacco with ships from New Amsterdam. It was predicted that reshipping to Holland would result in a loss of £10,000 to the Crown’s coffers per year. According to a report from 1666, which most likely overstated its findings, the illicit selling of Virginia tobacco resulted in a revenue loss of £100,000. Colonial shippers often circumvented the Navigation Acts by transporting commodities from one colony to another under the guise of “shipping goods from one colony to another.” The Royal Navy was unable to keep tabs on the hundreds of colonial ships that were actively trading in the coastal and oceanic seas because it was impossible. These tax avoidance strategies and the resulting income loss caused the English government to become more anxious. In the year 1672, a tax of one cent per pound was levied on any tobacco that was being transported from one colony to another. If the goods were afterwards transported to one of the other English colonies, the tax was increased by one cent. The law that required duties to be paid before specified articles could be loaded in the colonies was adopted by Parliament in 1673. This regulation could only be circumvented by posting a bond to prove that the commodities were bound for England.

The English customs department was expanded to include the colonies via the Act of 1673. To monitor the shipment of tobacco and guarantee that royal charges were paid in full, the first official customs agent was sent to Virginia. This agent’s mission was to verify that tobacco was only carried to England. His incentive was remuneration as a proportion of the revenues that were collected, and he had the ability to seek assistance from the Royal Navy in enforcing the act.

It was no more appealing to the colonists to pay taxes to the English customs officers than it had been to pay taxes to their own colonial administrations. In the first few decades after the act of 1673, the colonists were responsible for the deaths of three customs officials, the imprisonment of two others, the trial of one for treason, and the recruitment of one new member.

How did they manage to defy the authority of England? Colonial governors and the officers under their authority were given the responsibility of carrying out the Navigation Acts. The majority of the time, colonial rulers had more in common with the expanding affluence of their subjects than they did with an English administration that was located far away. The rulers of the colonies were not eager to cede their power to “foreign agents.” A significant number of colonial rulers in the seventeenth century were already more American than English.

After William of Orange arrived in England in 1688, the tight grip that the English government had on its regulatory apparatus began to loosen. His nation was at war with France for 19 of the following 25 years, and in order to win this fight, England need the assistance of her American colonies. Therefore, the King and Parliament granted a significant amount of authority to the various colonial administrations.

At the end of the seventeenth century, the Navigation Acts were respected more in the sense that they were broken than in the sense that they were observed. The Royal Treasury was only able to collect a little amount in taxes. After the French and Indian Wars, there would be a significant shift in the way things were, but that will be the topic of another article.


At the end of the seventeenth century, the dust had settled, and 250,000 colonists had secured for themselves the power to tax and spend that was largely free from governors and their officials who were sent from England, appointed by the proprietors, or chosen from among themselves in the charter colonies. This gave the colonists a great deal of autonomy over their financial situation. Even when rates, poll taxes, duties, and other levies were authorized by elected representatives to colonial legislatures, taxpayers sought to minimize their taxes in every conceivable way, including hiding real assets, undervaluing farmland, making payment in sub-standard commodities, and outright refusing to pay. In other words, taxpayers tried to avoid paying their taxes in any way possible. In the first century of American colonial history, a stable and low-tax foundation was established, which laid the groundwork for the economic independence of subsequent generations of Americans.

F.A.Q which part of the colonial government held the power of taxation

F.A.Q which part of the colonial government held the power of taxation
F.A.Q which part of the colonial government held the power of taxation

Who within the colonial population, whether a body or an individual, had the authority to levy taxes?

The demonstrations were founded on the legal basis that the colonial legislatures only had the authority to levy taxes on inhabitants of the territory if those persons had representatives serving in the legislature. And despite the fact that certain colonies had formal emissaries to Parliament, such as Benjamin Franklin, none of the colonies had members sitting in the British Parliament at the time.

Who had authority over the colonial administrations’ finances and taxation systems?

Colonial governments had the authority to enact laws and levy taxes upon its subjects.

Who was responsible for collecting taxes in the colonies?

The Quartering Act of 1765 and the Quartering Act of 1774 were laws that were passed to compel local governments in the 13 colonies to provide provisions and housing to British soldiers who were stationed in America. These laws were enacted as a result of the British occupation of America at the time.
The imposition of taxes inside the Colonies.

How were tax payments made in the early American colonies?

The proprietors were given permission to levy taxes on the people under their control. Direct taxes were those that were permitted by legislation that were adopted in colonial legislatures. These taxes often comprised a general property tax, which was paired with the poll tax, and in certain cases, a direct land tax.

Who in colonial administrations had the authority to levy taxes? (1607-1776)

*Colonial assembly, which at one point also had their own governors; but, following the French and Indian War, both taxes and governors were appointed by the British crown and were subject to its authority.

In the Articles of Confederation, who had the authority to levy taxes? (1781-1789)

The state’s authority is made manifest by the imposition of taxes.
The federal government lacked the authority to levy taxes and could only make requests to the states for financial support.

After the Constitution, who had the authority to levy taxes? (1789-present)

Both the federal government and the states’ governments.

Who had the authority to enact laws, and how was the legislature under colonial administrations structured?

The colonies were forced to form legislative assemblies, and these assemblies might either be unicameral or bicameral depending on their preferences.
Following the French and Indian War, parliament assumed a more dominant role.

During the time of the Articles of Confederation, who had the authority to enact laws, and how was the legislative body structured?

In order to leave lawmaking choices up to the states, Congress was purposefully kept in a weak position.
Each state got one vote.

Who possessed the authority to enact laws, and how did the Constitution arrange the legislature to carry out that authority?

laws enacted by both the powerful national authority (Congress) and the legislators of each individual state.
House of Representatives and Senate, making up the two chambers of the legislature.
One vote per congressman

How do people be elected to legislative positions in colonial governments?

Varied across states.
The process was democratic, but the elites and religious leaders continued to have an advantage.

In the Articles of Confederation, what criteria are used to choose legislators?

Delegates chosen by the legislatures of their respective states.
The number of members each state sent to Congress ranged from 2 to 7.

After the Constitution, what criteria are used to choose legislators?

Two Senators are elected every six years by the various state legislatures.
Representatives in the House of Representatives are chosen by the general people of their respective states and serve two-year terms after being elected to office.

Who had the position of executive power in early administrations of the colonies?

Royal governors and the King, although royal governors were relatively powerless due to the fact that colonial legislatures paid for their wages.

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