Raleigh NC CPA

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 doubt concerning this topic? Of course the American Civil War was about the slavery issue… wasn’t it? Well actually, one of the most hoaxes in American history is that the Civil War was started because of the slavery issue and that Lincoln, the Great Emancipator, started a bloody war to sever the chains of bondage that shackled over three million black Americans. Right before the war, the South had everything it could have wanted.

In 1860, the South controlled the Supreme Court and Lincoln and Congress were approving a constitutional amendment to protect slavery for all time! So 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 extinguished and the South did not see a need to keep up the exorbitant import taxes which appeared to only raise 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. In either case, the South’s funds ended up in the North. To say the South was not happy with this arrangement would be an understatement. If you are 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 nullify these federal import taxes. The South declared the tax was unconstitutional and gave the governor the power to to defy the enforcement of these taxes instituted by the national government. It looked like a civil war was in the making. Mild tempers won over, 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 commercial and manufacturer companies forced into Congress new taxes that again oppressed Southern planters and made Northern manufacturers become rich. In 1850, John C. Calhoun, the South’s most exceptional spokesperson, delivered a speech to Congress. It spoke of three wrongs done to the South that could cause secession from the Union and war. The first two had to do with fears concerning the gradual decline of power of the South in general and the the power of state government in particular.

The third, and really the only concrete grievance, concerned tax policy. In Calhoun’s view, national import taxes was a targeted legislation against the South. Huge amounts of taxation on the South raised money that was used in the North. The center of economic life in the United States was shifting strongly to the North. Calhoun threatened secession if the taxes were not reduced. 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 really care about enslaved blacks, just as little as how much they worried about the Native-American in the West or poor illiterate workers in factories. By and large many black slaves received substantially better quality treatment and better compassion than their working-class counterparts in the North. Lincoln, in fact, assured Southern slave-owners that run-away slaves would be returned. The Congress and subsequently the Supreme Court (Dred Scott decision) further affirmed that slavery was here to stay.

However, as soon as Lincoln was placed in office and Congress assembled in 1861, they created more high import tariffs. Slavery wasn’t 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, started to fill with Union 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 brewing for decades - but it was not over slavery. It was over taxes.

2 years after that, Lincoln put into action the Emancipation Proclamation, and then only following repeated 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 about black people in bondage, no more than they cared of Native-Americans to the west or poor illiterate workers in the factories. For the most part, most black slaves got 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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