Why Britain Attempted to Tax American Colonists

The Destruction of Tea at Boston Harbor by Nathaniel Currier
The Destruction of Tea at Boston Harbor by Nathaniel Currier. Wikimedia Commons

The attempts by Britain to tax its North American colonists led to arguments, war, the expulsion of British rule and the creation of a new nation. The origins of these attempts lay, not in a rapacious government, but in the aftermath of the Seven Years' War. Britain was attempting to both balance finances–through tax—and control the newly acquired parts of their empire, through asserting sovereignty. These actions were complicated by British prejudice. More on the causes of the war.

The Need for Defence

During the Seven Years' War Britain had won a string of major victories and expelled France from North America, as well as parts of Africa, India, and the West Indies. ‘New France’, the name of France’s North American holdings, was now British, but a newly conquered population could cause problems. Few people in Britain were naïve enough to believe that these former French colonists would suddenly and wholeheartedly embrace British rule with no danger of rebellion, and Britain believed troops would be needed to keep order. In addition, the war had revealed that the existing colonies needed defense against Britain’s enemies, and Britain believed that defense was best provided by the fully trained regular army, not just colonial militias. To this end, the post-war government of Britain, with a major lead taken by King George III, decided to permanently station units of the British army in America. Keeping this army would take money.

There was a political impetus behind this need. The Seven Years War had seen the British army expand from around 35,000 to over 100,000 men under arms, and opposition politicians in Britain now expected the army to decrease in number during peacetime. But, as well as needing more troops to garrison a suddenly enlarged empire, the government feared having to pension off masses of the officers, who were closely connected to politicians.

The Need for Tax

The Seven Years War had seen Britain spend prodigious amounts, both on its own army and on subsidies to allies. The British national debt had doubled in that short time, and extra taxes had been levied in Britain. The last one, the Cider Tax, had proved highly unpopular and many people were agitating to have it removed. Britain was also running short of credit with banks. Under huge pressure to curb spending, the British King and government believed that any further attempts to tax the homeland would fail. They thus seized upon other sources of income, and one of these was taxing the American colonists in order to pay for the army protecting them.

The American colonies appeared to the British government to be heavily under taxed. Before the war the most colonists had directly contributed to British income was customs revenue, but this barely challenged the cost of collecting it. During the war, huge sums of British currency had flooded into the colonies, and many not killed in the war, or in conflicts with natives, had done rather well. It appeared to the British government that a few new taxes to pay for their garrison should be easily absorbed. Indeed, they had to be absorbed, because there simply didn’t seem to be any other way of paying for the army. Few in Britain expected the colonists to have protection and not pay for it.

Unchallenged Assumptions

British minds first turned to taxing the colonists in 1763. Unfortunately for King George III and his government, their attempt to transform the colonies politically and economically into a safe, stable and revenue producing – or at least revenue balancing – part of their new empire would flounder, because the British failed to understand either the post-war nature of the Americas, the experience of war for the colonists, or how they would respond to tax demands. The colonies had been founded under crown/government authority, in the name of the monarch, and there had never been any exploration of what this really meant, and what power the crown had in America. While the colonies had become almost self-governing, many in Britain assumed that as they sent governors to the colonies, legislated for them in the British parliament, had a veto over colonial laws, and because the colonies largely followed British law, that the British state had rights over the Americans.

No one in the decision making heart of government appears to have asked if colonial troops could have garrisoned America, or if Britain should ask the colonists for financial aid instead of voting in taxes above their heads. This was partly the case because the British government thought it was learning a lesson from the French-Indian War: that the colonial government would only work with Britain if they could see a profit, and that colonial soldiers were unreliable and undisciplined because they operated under rules different to the British army. In fact, these prejudices were based on British interpretations of the early part of the war, where co-operation between the politically poor British commanders and the colonial governments had been tense, if not hostile. But these views ignored the adaptations of the colonies in the final years, when they had born 3/5 of the costs, provided as many troops as asked for, and generally came together to fight a common enemy and achieved victory.

The Briton who had overseen such a partnership, Pitt, was now out of power and refused to come back.

The Issue of Sovereignty

Britain responded to these new, but false, assumptions about the colonies by wishing to expand British control and sovereignty over America, and these demands contributed another aspect to the British desire to levy taxes. In Britain, it was felt that the colonists were outside the responsibilities which every Briton had to bear and that the colonies were too far removed from the core of British experience to be left alone. By extending the duties of the average Briton to the US – including tax – the whole unit would be better off.

The British believed sovereignty was the sole cause of order in politics and society, that to deny sovereignty, to reduce or split it, was to invite anarchy and bloodshed. To view the colonies as separate from British sovereignty was, to contemporaries, to imagine a Britain dividing itself into rival units, and possible warfare between them. Britons dealing with the colonies frequently acted out of fear of reducing the crown’s powers when faced with the choice of levying tax or acknowledging limits.


Some British politicians did point out that levying taxes on the unrepresented colonies was against the rights of every Briton, but there weren’t enough to overturn new tax legislation. Indeed, even when protests came in about the initial taxes from the Americans, many in Parliament ignored or patronisingly rejected them. This was partly because of the sovereignty issue and partly because of contempt for the colonists based on the French-Indian war experience. It was also partly due to prejudice, because some politicians believed the colonists were somehow subordinate, a child to the British motherland needing discipline, or a nation of social inferiors. The British government was far from immune to snobbery.

The 'Sugar Act'

The first post-war attempt to change the financial relationship between Britain and the colonies was the American Duties Act of 1764, known commonly as the Sugar Act for its treatment of molasses. This was voted in by a large majority of British MPs, and had three main effects: there were laws to make customs collection more efficient, including improving the lives of customs men and introducing a records system similar to that of Britain to reduce taxes; to add new charges on consumables in the US, partly to push the colonists into buying imports from within the British empire; and a change to existing costs, in particular the imports of molasses. The duty on molasses from the French West Indies actually went down, and an across the board 3 pence a ton was instituted.

Political division in America stopped most complaints about this act, which started among affected merchants and spread to their allies in assemblies, having any major effect. However, even at this early stage – as the majority seemed slightly confused as to how laws affecting the rich and the merchants could affect them – colonists heatedly pointed out that this expansion of tax was being carried out with no expansion of the right to vote in the British parliament which levied it. Some argued that they were in danger of being made into slaves, a powerful point given 17% of the colonist population were slaves (Middlekauff, The Glorious Cause, p. 32).

The Stamp Tax

In February 1765, after only minor complaints from the colonists when the idea was floated due to confusion and disbelief, Grenville’s government imposed the Stamp tax. To him, this was just a slight increase in the process of balancing expenses and regulating the colonies. There was opposition in the British parliament, including Lieutenant Colonel Isaac Barré, whose off the cuff speech made him a star in the colonies and gave them a rallying cry as the “Sons of Liberty”, but not enough to overcome the government vote.

The Stamp Tax was a charge applied on every piece of paper used in the legal system and in the media. Every newspaper, every bill or court paper, had to be stamped, and this was charged for, as were dice and playing cards. The aim was to start small and allow the charge to grow as the colonies grew, and was initially set at two thirds of the British stamp tax. The tax would be important, not just for the income, but for the precedent it would set over sovereignty: Britain would start with a small tax, and maybe one day levy enough to pay for the colonies’ whole defence. The money raised was to be kept in the colonies and spent there. A second act followed, the Quartering Act. This dealt with where troops would be billeted if there were no rooms in barracks, and was watered down after discussions with colonial representatives. Unfortunately, its provisions included costs to the colonists that were open to interpretation as taxes.

America Reacts

Grenville’s Stamp Tax bill was designed to be subtle and ease the new Anglo-Colonial relationship in. He got it very wrong. Opposition was initially confused, but consolidated around the five Resolutions given by Patrick Henry in the Virginia House of Burgesses, which were popularised and added to by newspapers. A mob gathered in Boston and used violence to coerce the man responsible for the Stamp’s application to resign. Brutal violence spread, and soon there were very few people in the colonists willing or able to enforce the law. When it came into effect in November it was effectively dead, and the American politicians responded to this anger by denouncing un-consented taxation and looked for peaceful ways to try and persuade Britain to scrap the tax while remaining loyal. Boycotts of British goods were put into place.

Britain Seeks a Solution

Grenville lost his position as developments in America were reported to Britain, and his successor, the Duke of Cumberland, decided to enforce British sovereignty by force. However, he suffered a heart attack before he could order this, and his successor resolved to try and find a way to repeal the Stamp tax but keep sovereignty intact. The government followed a twofold tactic: to verbally (not physically or militarily) assert sovereignty, and then cite the economic effects of the boycott to repeal the tax. The ensuing debate made it quite clear – to contemporaries as well as later historians – that British Members of Parliament felt the King of Britain had sovereign power over the colonies, had the right to pass laws affecting them, including taxes, and that this sovereignty overruled representation. These beliefs underpinned the Declaration Act. Then they agreed, somewhat expediently, that the Stamp Tax was damaging trade and they repealed it in a second act. People in Britain and America celebrated.


The result was the development of a new voice and consciousness among the American colonies. This had been emerging during the French Indian War, but now issues of representation, taxation and liberty began to take centre stage. There were fears that Britain intended to enslave them. On Britain’s part, they now had an empire in America which was proving expensive to run and difficult to control. These contradictions would not be solved over the next few years without a new war, separating the two. The Effects of the War on Britain.