The Lesson in Taxation, Section 9: Tax Law, the Slavery Issue, 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 a doubt about it? Of course the American Civil War was about slavery… 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 break the claims of bondage that enslaved over 3 million black Americans. Right before the war, the South had everything it could have wanted.
In 1860, Southerners controlled the Supreme Court and Lincoln and Congress were beginning the process of passing a constitutional amendment to protect slavery forever! What happened?
Let’s rewind the time back to the year 1832. By that year the national debt from the War of 1812 had been extinguished and Southerners did not see a need to keep up the high import taxes that seemed to only raise prices for Southern consumers. Either the South paid high import taxes on imported goods or it purchased Northern manufactured goods at terribly overpriced prices. Either way, Southern money transferred to the North. To say the least, the South was not happy with this arrangement. 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 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 seemed 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 next few years, however, Northern corporate and manufacturer interests bullied into Congress new taxes that once again stressed Southern planters and made Northern manufacturers become rich. In 1850, John C. Calhoun, the South’s greatest exceptional spokesperson, gave a speech to Congress. His speech listed three grievances of the South that may cause secession from the Union and war. The first two involved fears concerning the gradual decline of power of the South in general and the states as well.
The third, and really the only concrete complaint, 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 focus of economic strength in the United States was shifting strongly to the North. Calhoun spoke of secession if the taxes were not reduced. But what about the slaves? Well, in 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 did not care much 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 better treatment and more compassion than their working-class counterparts in the North. Lincoln, in fact, told Southern plantation-owners that fugitive slaves would be returned. The Congress and subsequently the Supreme Court (Dred Scott decision) continually affirmed that slavery was not going anywhere.
But, as soon as Lincoln was elected and Congress came together in 1861, they enacted new high import tariffs. Slavery was not an issue – 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 began in 1861 when South Carolinians shot at the federal garrison at Fort Sumter. The conflict had been brewing for decades – but it wasn’t about slavery. It was about tax policy.
Two years later, Lincoln issued the Emancipation Proclamation, and then only after repeated military battles, as a last resort to rally the North to a noble cause. To address the slave issue – most the North didn’t care much concerning black people in bondage, no more than they cared of Native-Americans to the west and the poor uneducated peasants in the factories. Ironically, many black slaves got 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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