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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 any doubtful thoughts concerning it? Of course the American Civil War was about the slavery issue… was it not? Well actually, one of the most popular myths in our history is that the Civil War was started because of the slavery issue and that Lincoln, the Great Emancipator, started a bloody struggle to sever the chains 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 beginning the process of passing a constitutional amendment to keep slavery for all time! What happened?

We should rewind the time back to the year 1832. By that year the national debt left from the War of 1812 had been paid and Southerners saw no need to continue the exorbitant import taxes that seemed to only jack up price tags for the South’s consumers. Either the South paid high import taxes on imported goods or it purchased Northern manufactured goods at terribly overpriced prices. In either case, the South’s money transferred to the North. To say the least, the South was not happy with this arrangement. 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!

So, in 1832 a convention was hosted in South Carolina to get rid of these federal import taxes. The convention declared the tax was unconstitutional and authorized the governor to resist the enforcing of these taxes instituted by the federal government. It looked like a civil war was in the works. Cool heads prevailed, however, and the Great Compromise of 1833 lowered import taxes over the subsequent several years to levels the South would tolerate. Go here if you want help with a modern-day Tax Return in Raleigh, NC.

Over the next few years, however, Northern commercial and manufacturing interests bullied into Congress new taxes that again oppressed Southern planters and allowed Northern Manufacturers to become rich once again. In 1850, John C. Calhoun, the South’s greatest outstanding spokesperson, gave a speech to Congress. It spoke of three grievances of the South that could lead to secession from the Union and war. The first two involved fears about the gradual decline of power of the South in general and the states as well.

The third, and only concrete grievance, concerned tax policy. In Calhoun’s eyes, national import taxes was a class legislation against the South. Huge amounts of taxation on the South created money that was used in the North. The center of economic strength in the country was shifting strongly to the North. Calhoun threatened secession if the taxes weren’t reduced. But what about the slaves? Well, during his run for the presidency in 1860, Lincoln repeatedly said he wouldn’t interfere with slavery in the South. Actually, the vast majority of Northerners didn’t care much about black men in bondage, just as little as how much they worried about the Native-American in the West or poor uneducated workers in factories. The majority of black slaves got better treatment and more compassion than their counterparts in the North. Lincoln, actually, told Southern slave-owners that run-away slaves would be caught. The Congress and then the Supreme Court (Dred Scott decision) further acknowledged that slavery was here to stay.

However, as soon as Lincoln was placed in office and Congress assembled in 1861, they created new high import tariffs. Slavery was not the issue - higher import taxes were. In his inaugural address Lincoln said he would go get the customs in the South even if there was a secession!

Fort Sumter, near the beginning of the Charleston Harbor, began filling with federal troops to support the collection of the new taxes. The Civil War began in 1861 when South Carolinians fired on the federal garrison at Fort Sumter. The inevitable had been brewing for years - but it was not about slavery. It was about tax policy.

Two years after that, Lincoln put into action the Emancipation Proclamation, and then only after repeated military defeats, as a last resort to rally the North to a worthwhile cause. To address the slave issue - the majority of Northerners cared little about black people in bondage, no more than they cared about Indians to the west and the impoverished uneducated peasants in the factories. By and large, most black slaves received better treatment and more compassion than their impoverished counterparts in the North.

That’s it for the History of Taxes Series!

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