Boston Tea Party 250th Anniversary: What Really Happened
This is part of our educational blog series, “The Short Form,” to simplify tax issues and explore the world through the lens of tax policy. Learn more about taxes with TaxEDU.
Did you know the Boston Tea Party was caused not by a taxA tax is a mandatory payment or charge collected by local, state, and national governments from individuals or businesses to cover the costs of general government services, goods, and activities.
increase, but by a tax decrease?
To be sure, in the lead-up to the famous revolt 250 years ago, the British government did raise taxes several times to pay back government debt from the French and Indian War. But the tax hikes weren’t the direct reason 90,000 pounds of tea ended up in the Atlantic Ocean.
What Really Happened?
It’s true: the colonists fiercely resisted higher taxes, for example, the Sugar Act in 1764, the Stamp Act in 1765, and the Townsend Acts in 1767. Typically, they boycotted British goods and intimidated tax collectors. They also formed groups to take a stand against the Crown.
One such group was the Stamp Act Congress, created to provide a unified response to Great Britain’s attempt to tax activities within the American colonies. Before the passage of the Stamp Act in 1765, British taxes had only applied to external activities like trade, a policy colonists disliked but did not dispute.
The Stamp Act taxed the internal activities of the colonies—despite a lack of colonial representation in Parliament. In response, the Stamp Act Congress declared “That it is inseparably essential to the freedom of a people, and the undoubted rights of Englishmen, that no taxes should be imposed on them, but with their own consent, given personally, or by their representatives.”
Colonists resisted the taxes both because they viewed them as a threat to the economic prosperity they enjoyed and because they had not consented to them. Though some in Britain wanted to use the military to enforce the Stamp Act, the law was quickly repealed instead. However, Britain soon made additional attempts to tax the colonies, which were followed by additional boycotts.
So, Where Does the Tea Come In?
After a few relatively quiet years on the tax front, Parliament passed the Tea Act in 1773 to reduce import taxes on British tea. Why? To give the British East India Company monopoly privileges to sell tea directly to the colonies. (Prior to the Tea Act, the Navigation Acts required nearly all colonial imports and exports to first be artificially routed through Great Britain, which added extra costs.) At the time, nearly two-thirds of the tea imported into the colonies was smuggled to avoid paying taxes. Colonial merchants thrived while the East India Company struggled.
The Tea Act lowered the price of legally imported tea to prop up Britain’s sales—at the expense of colonial merchants.
Showdown in the Harbor
Angered by the changes, merchants pushed for a boycott and turned tea shipments away from American ports. In Boston, some East India Company ships docked but were not permitted to unload. Colonists wanted to turn the ships back to Great Britain without paying taxes, but the governor insisted the taxes must be paid. And so, on December 16, a crowd of merchants and locals gathered on the docks, stormed the ships, and dumped 342 chests of tea, or about 90,000 pounds, into the harbor in protest.
Thus, the Boston Tea Party itself was instigated by a tax decrease. But the broader shift toward higher taxes, particularly internal taxes without representation, that began at the end of the French and Indian War provoked increasing colonial resentment and resistance.
The commercial and economic grievances—including taxes—were just as consequential to the American Revolution as the constitutional grievances. Check out “The History of Taxes” from TaxEDU to dive into the impact taxes have had—both large and small—throughout history.
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