Constitutional History of the American Revolution

2. The Authority to Tax

CHAPTER TWO THE AUTHORITY TO TAX The British Parliament made two constitutional mistakes during the 1760s. First, it assumed unilaterally that it possessed authority to enact legislation of a type it had never before enacted. That is, Parliament assumed that its authority was derived from the constitution of sovereign command and that it was not restrained by the constitution of customary rights. Parliament's second mistake followed from the first. It assumed constitutional authority to tax the North American colonies for purposes of revenue. The American Revolution was precipitated by the passage of the Stamp Act of 1765, which imposed a tax on the British colonies in the Caribbean and on the North American mainland. The law reqUired the colonists to purchase stamps to be affIXed to every newspaper, legal document, and some other forms of paper sold or distributed in the colonies. Revenue was needed, the British ministry contended, to support British troops stationed in North America'! More importantly, it was hoped the income would relieve British taxpayers ofthe crushing debt that had been accumulated from the recent Seven Years War against France and Spain. The Stamp Act gave Americans the greatest constitutional shock of their colonial experience; it may have triggered the greatest constitutional shock in all American history. Until 1765, the colonists had been confident Parliament could not tax them for purposes of raising revenue. They thought 26 THE AUTHORITY TO TAX 27 themselves shielded by the constitution of customary rights and its various maxims of restraint upon legislative power, such as the principle that English people could be taxed only by their own consent or the consent of their representatives. Today their faith in that constitution seems incredible. We read their words-there are certainly enough of them, for they were always boasting of their rights-yet it is hard to believe how completely they basked in its security and glOried in the fact that it made them the freest people in the world.2 The colonists knew that they, like their fellow Britons living in the mother country, were the envy of Europe. When Parliament promulgated the Stamp Act not only their sense of constitutional security but their confident place in the world came crashing down around them. The shock spread beyond just American whigs, those people who would rebel against Great Britain in 1776. Also opposing the Stamp Act were those other Americans who would later remain loyalists and support their king if not the Parliament. Just about every educated North American reacted to the perceived constitutional peril posed by the Stamp Act. The word on everyone's lips was "unconstitutional" and the principle informing people that the stamp tax was unconstitutional was precedent. The Stamp Act, Americans said, was unprecedented. Americans did not assert that the Stamp Act was unprecedented because they had never been taxed by Parliament. It was not the taxation element of the Stamp Act that made it unprecedented. Ever since the Commonwealth period, when Oliver Cromwell and the Puritans had ruled England, Parliament had been imposing taxes on the colonies in the form of import duties. These taxes were constitutional, Americans said, because of the purpose for which they had been enacted. They were taxes imposed to regulate trade, an end made constitutional by custom3 and by the passage of immemorial time.4 The Stamp Act's purpose was different. It was to raise revenue from the American colonies, revenue intended for the British treasury. The colonists were probably right, but as with every question involving custom there were exceptions to the rule casting doubts on the application of the principle. British imperialists, to be sure, would never cotton to the trade-regulation distinction. For them the precedential element was in the tax, not the purpose. All import duties were precedents for the Stamp Act, even legislation clearly stating that the tax was imposed for the purpose of regulation.5 Here we encounter one of those uncluttered questions of law that Americans would take to the judiciary for solution after 1789 but which, under the British constitution then and now, could not be resolved except by Parliament, a tribunal hardly acceptable to American whigs. Besides, American whigs had no doubts about the constitutionality of the distinction, raising it at the very beginning of the controversy and making it, at the very end, a central prop of the constitutional formula for resolving the crisis 28 THE AUTHORITY TO...