The Lesson in Taxation, Chapter Nine: Tax Law, Slavery, and the American Civil War
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
Can there be any doubtful thoughts about it? Certainly the American Civil War was about the slavery issue… was it not? Well actually, one of the greatest hoaxes in American history is that the Civil War was started over the slavery issue and that Lincoln, the Great Emancipator, used a bloody war to sever the claims of bondage that shackled over three million black Americans. Just prior to the war, the South had everything its way.
In 1860, Southerners held the Supreme Court and Lincoln and Congress were approving a constitutional amendment to keep slavery forever! So what happened?
Let's move the clock back to the year 1832. By that year the national debt left from the War of 1812 had been paid and the South saw no need to keep up the high import taxes which appeared to only jack up prices for the South's consumers. Either the South paid high import taxes on imported goods or it bought Northern manufactured goods at terribly overpriced prices. Either way, the South's funds ended up in the North. To say the South wasn't 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 get rid of these federal import taxes. The South decided the tax was unconstitutional and authorized the governor to resist the enforcing of the import taxes instituted by the national government. It looked like a civil war was in the works. Mild tempers prevailed, however, and the Great Compromise of 1833 reduced import taxes over the subsequent several years to levels the South could 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 allowed Northern Manufacturers to become rich once again. In 1850, John C. Calhoun, the South’s greatest outstanding spokesman, gave a speech to Congress. His speech listed 3 grievances of the South that could cause secession from the Union and war. The first two involved fears about the erosion of power of the South in general and the the power of state government as well.
The third, and only concrete complaint, concerned tax policy. In Calhoun’s eyes, national import taxes was a targeted legislation against the South. Heavy taxation on the South created money that was spent in the North. The center of economic life in the country was steadily changing strongly to the North. Calhoun threatened secession if the taxes were not lowered. But what of the slavery issue? Well, during his campaign for the presidency in 1860, Lincoln repeatedly said he would not do anything about slavery in the South. Truly, the vast majority of Northerners didn't care much about enslaved blacks, any more than they cared about the Indian in the West or poor uneducated workers in factories. By and large many black slaves got substantially better quality treatment and better compassion than their counterparts in the North. Lincoln, in fact, assured Southern plantation-owners that run-away slaves would be returned. The Congress and subsequently the Supreme Court (Dred Scott decision) continually affirmed that slavery was here to stay.
However, just as Lincoln was elected and Congress came together in 1861, they enacted new high import tariffs. Slavery was not the problem – higher import taxes were. In his inaugural address Lincoln said he would collect the customs in the South even if there happened to be a secession!
Fort Sumter, near the entrance of the Charleston Harbor, began filling with Union soldiers to enforce the collection of the new taxes. The Civil War started in 1861 when South Carolinians shot at the federal garrison at Fort Sumter. The conflict had been stewing for years – but it wasn't about slavery. It was over taxes.
2 years after that, Lincoln put into action the Emancipation Proclamation, and then only after repeated military battles, as the last resort to rally the North behind a noble cause. With respect to the slave issue – the majority of the North didn't care much concerning black people in bondage, no more than they thought about Native-Americans in the west or poor illiterate workers in the factories. For the most part, many 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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