The Lesson in Tax Law, Part 9: Taxation, the Slaves, and the American Civil War
Posted by | Posted in Internet Marketing | Posted on 07-02-2010
W. Marc Gilfillan, CPA, NC, individual and business CPA and Tax expert, shares about the history of taxes…
“Slavery – the one cause of the Civil War.” – John Stuart Mill, 1862
Could there be a doubtful thoughts about this topic? Of course the American Civil War was about slavery… wasn’t it? Well actually, one of the greatest popular myths in our history is that the Civil War began because of slavery and that Lincoln, the Great Emancipator, used a terrible struggle to sever the claims of bondage that enslaved over 3 million black Americans. Just prior to the war, the South had everything its way.
In 1860, Southerners controlled the Supreme Court and Lincoln and Congress were approving a constitutional amendment to protect slavery forever! What happened?
We should move the time back to the year 1832. By that year the national debt from the War of 1812 had been re-paid and the South saw no need to keep up the high import taxes that seemed to only raise prices for the South’s consumers. Either the South had to pay high import taxes on foreign goods or it bought Northern manufactured goods at excessive prices. In either case, the South’s money ended up in the North. To say the South was not content with this arrangement would be an understatement. If you’re feeling the pressure with today’s taxes, call a CPA for Tax Preparation in Raleigh, NC for all your tax-related needs!
Consequently, in 1832 a convention was held in South Carolina to nullify these federal import taxes. The convention declared the tax was unconstitutional and gave the governor the power to to resist the enforcement of these taxes instituted by the federal government. It looked like a civil war was in the making. Mild tempers prevailed, however, and the Great Compromise of 1833 reduced import taxes over the next few years to an area the South would tolerate. Go here if you want help with a modern-day Tax Return in Raleigh, NC.
Over the ensuing years, however, Northern corporate and manufacturer companies forced through Congress new taxes that once again stressed Southern planters and made Northern manufacturers become rich. In 1850, John C. Calhoun, the South’s greatest outstanding spokesperson, delivered a speech to Congress. It spoke of 3 wrongs done to the South that may lead to secession from the Union and war. The first two involved fears concerning the erosion of power of the South in general and the the power of state government in particular.
The third, and only solid grievance, was about tax policy. In Calhoun’s eyes, federal import taxes was a targeted legislation against the South. Heavy taxation on the South raised funds that were used in the North. The focus of economic life in the United States was steadily changing heavily to the North. Calhoun spoke of secession if the taxes weren’t lowered. But what of the slavery issue? Well, during his run for the presidency in 1860, Lincoln steadily repeated he would not do anything about slavery in the South. Truly, the vast majority of Northerners didn’t care much about enslaved blacks, just as little as how much they cared about the Native-American in the West or poor uneducated workers in factories. The majority of black slaves got substantially better quality treatment and better compassion than their working-class counterparts in the North. Lincoln, in fact, promised Southern slave-owners that run-away slaves would be caught. The Congress and then the Supreme Court (Dred Scott decision) continually affirmed that slavery was not going anywhere.
However, as soon as Lincoln was elected and Congress came together in 1861, they created more high import tariffs. Slavery wasn’t an problem – higher import taxes were. In his inaugural address Lincoln stated he would collect the customs in the South even if there was a secession!
Fort Sumter, at the beginning of the Charleston Harbor, started to fill with federal soldiers to support the collection of the new taxes. The Civil War started in 1861 when South Carolinians fired on the federal garrison at Fort Sumter. The conflict had been stewing for years – but it wasn’t over the slaves. It was about taxes.
Two years after that, Lincoln issued the Emancipation Proclamation, and then only following several military defeats, as a last resort to rally the North behind a noble cause. With respect to the slave issue – the majority of Northerners cared little concerning black people in bondage, no more than they cared about Indians to the west and the poor illiterate peasants in the factories. Ironically, many black slaves received better treatment and greater compassion than their impoverished counterparts in the North.
That’s it for the History of Taxes Series!
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