Taxation, External and Internal

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Taxation, External and Internal

TAXATION, EXTERNAL AND INTERNAL. Before 1765, Americans had not clearly thought through an answer to the question of Parliament's right to levy taxes on the colonies. There was general agreement that Parliament had the right to regulate trade, a consequence of which might be the raising of a revenue through customs duties on imports. The imperial government's attempt to tax Americans directly with the Stamp Act forced the colonists to clarify their thinking. In the process, a significant number of them came to believe that Parliament did not have the right to lay any tax on Americans, even to regulate trade. However, in order to facilitate repeal of the Stamp Act by Parliament, several influential individuals on both sides of the Atlantic—including William Pitt and Benjamin Franklin—introduced the idea that the colonists objected only to internal taxes, such as those prescribed by the Stamp Act, but conceded Parliament's right to raise a revenue through trade regulation. The stance was disingenuous at best, since most Americans made no distinction between external and internal taxes, and it introduced confusion into both policy decisions at the time and accounts of later historians. Charles Townshend, chancellor of the exchequer, cleverly constructed his revenue act in 1767 to avoid levying internal taxes, thereby "honoring" the colonists' distinction while also taking advantage of their failure to adopt a strong position prior to 1765 against all forms of parliamentary taxation. The purpose of the Massachusetts Circular Letter was to organize American resistance to all forms of parliamentary taxation, whether external or internal.

BIBLIOGRAPHY

Morgan, Edmund S., and Helen M. Morgan. The Stamp Act Crisis: Prologue to Revolution. Chapel Hill: University of North Carolina Press, 1953.

Thomas, Peter D. G. British Politics and the Stamp Act Crisis: The First Phase of the American Revolution, 1763–1767. Oxford: Oxford University Press, 1975.

――――――. The Townshend Duties Crisis: The Second Phase of the American Revolution, 1767–1771. Oxford: Oxford University Press, 1987.

revised by Harold E. Selesky

Encyclopedia of the American Revolution: Library of Military History