The Colonial Roots of American Taxation, 1607-1700

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... The colonies' sparse populations negated the need for more extensive government services. As Rabushka (2002) noted, it took from 1607 to 1630 to reach a combined population of 4,646 in six colonies: Maine, New Hampshire, Plymouth, Massachusetts, New York, and Virginia. Even by 1640, after the establishment of new settlements in Rhode Island, Connecticut, and Maryland, the total population of the colonies was only 26,634. ...
... Even by 1640, after the establishment of new settlements in Rhode Island, Connecticut, and Maryland, the total population of the colonies was only 26,634. The population of the colonies would not reach 50,000 until mid-century (Rabushka 2002). ...
... 22 Bogart and Kemmerer (1947), p. 133, Galbraith (1975), p. 51, n4, Nussbaum (1957), pp. 16-7, Nettels (1934, p. 265, Rabushka (2002), Davis (2002), p. 462, Shortt (1898b), pp. 128-9. ...
Paper money, when discretionally issued by a government, is one of the most powerful political and economic tools ever devised. Which government's use of this device caused its global spread? Scholars have tended to suggest home candidates without explicitly justifying their claims and without disproving competing claims. I examine the not-so-obvious monetary and public nature of the candidates, and the transmission of information about paper money innovations between countries and across time.
In this article a new explanation for the emergence of democratic institutions is proposed: elites may extend the right to vote to the masses in order to attract migrant workers. It is argued that representative assemblies serve as a commitment device for any promises made to labourers by those in power, and the argument is tested on a new political and economic dataset from the thirteen British American colonies. The results suggest that colonies that relied on white migrant labour, rather than slaves, had better representative institutions. These findings are not driven by alternative factors identified in the literature, such as inequality or initial conditions, and survive a battery of validity checks.
Conventional wisdom among contemporary liberal egalitarians is that taxing individuals according to their “endowment” or “earnings capacity” would constitute an unacceptable intrusion on basic human liberties. In effect, the argument goes, such a scheme would result in a type of slavery - in order to pay the tax, people would be forced to accept jobs commensurate with their identified levels of endowment. The most succinct formulation of this argument comes from John Rawls, who argued that an endowment tax “would force the more able into those occupations in which earnings were high enough for them to pay off the tax; it would interfere with their liberty to conduct their life within the scope of the principles of justice…” This Article examines the Rawlsian objection to endowment taxes and considers whether it can be distinguished from the libertarian claim, advanced most famously by Robert Nozick, that taxation of earnings is unjust because it is “on a par with forced labor.” The Article’s principal claim is that unless one assigns greater moral value to non-market activities than to market activities (a position arguably in tension with the liberal principle of neutrality as between alternative visions of the good life), there is no difference in kind or in degree between the interference with liberty occasioned by the two types of taxes. It follows from this analysis that if one accepts Rawls’s argument regarding endowment taxes, one must also accept Nozick's argument regarding wage taxes. If correct, this conclusion presents the liberal egalitarian with a dilemma: she must either (1) embrace endowment taxes as a moral ideal, rejecting the liberty concerns expressed by Rawls and others, or (2) join Nozick in renouncing the ordinary taxation of earnings, a move that would substantially weaken her commitment to egalitarian outcomes. The purpose of the Article is not to offer any particular resolution of this dilemma, but rather to expose some of the tensions inherent in the liberal egalitarian framework and to suggest that consideration of these tensions is necessary to the development of a more satisfactory liberal egalitarian position on questions of taxation and distributive justice. Toward that end, an alternative framework is suggested for assessing the liberty cost of taxation. It is contended that all taxes-whether on income, consumption, wealth, endowment or other tax bases-interfere with individuals’ pursuit of the good life. For any given level of revenue to be raised through taxation, the recognition and protection of a liberty interest in one type of activity will simply increase the liberty costs associated with unprotected activities. The liberal instinct to shield non-market activity from taxation does not reduce the liberty cost of taxation, but rather shifts it to those whose conceptions of the good life involve the use of markets. This is not to suggest that a concern for personal autonomy should not inform our choice of tax institutions, but rather that the question may ultimately be one of distribution. That is, in fashioning a tax system, how best can we allocate the benefit of being free from taxation's inevitable interference with personal autonomy?
This dissertation examines the history of fiscal politics and policy in the American states. It provides a narrative synthesis from the antebellum period through the 1930s, during which state governments created a fiscal regime based on the general property tax and then replaced it with modern tax instruments like income taxes and especially general sales taxes. The historical arc of those transformations is encapsulated in the dissertation's title: the rise and fall of wealth taxation. Whereas the general property tax had been a wealth tax, the modern instruments taxed the masses. A historiographic critique is interwoven in that narrative. The dissertation's title also hints at the primary thesis: to make sense of state fiscal history, one must place wealth taxation at the center of the analysis. In addition, this analysis must be grounded in political economy, so that fiscal transformations can be connected to simultaneous transformations in electoral politics, and so that fiscal transformations are properly understood as arising mainly from the political problems and opportunities of the existing political-fiscal regime rather than being driven by narrowly socioeconomic forces. Such an orientation provides leverage on the key historical questions and helps avoid several common misperceptions. Another central argument is that we cannot correctly interpret the big transition -- from wealth taxation to mass taxation -- if we do not attend to the transitional tax instruments that states used during the late nineteenth and early twentieth centuries: special or corporate property taxes, elite income taxes, and motor fuel taxes. The project also included the assembling of a fiscal dataset suitable for historical research. In addition to providing revenues and expenditures as reported by the underlying sources, the dataset includes harmonized data that uses a consistent set of classifications, facilitating historical analysis. Using this dataset and other sources, the dissertation provides an overview of the quantitative trends in American fiscal activity from 1800 to 2000. That overview culminates in a tabular periodization of the major fiscal regimes in the history of the United States.
The American Colonies in the Seventeenth Century, Vols. I and II, The Chartered Colonies, Beginning of Self Government
  • Herbert L Osgood
A discussion of specific taxes is found in Herbert L. Osgood, The American Colonies in the Seventeenth Century, Vols. I and II, The Chartered Colonies, Beginning of Self Government (Peter Smith, 1957). Originally published in 1904 by Columbia University Press. See Chapter XII in Volume I, 468-95, and Chapter XIV in Volume II, 347-74.