Earned Income Tax Credit | The History of Taxation, Part Nine: Taxes, Slavery, and the American Civil War

The History of Taxation, Part Nine: Taxes, Slavery, and the American Civil War

Raleigh NC Accountant

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 doubt about this topic? Certainly the American Civil War was about slavery… wasn’t it? Well actually, one of the most hoaxes in American history is that the Civil War began over the slavery issue and that Lincoln, the Great Emancipator, started a bloody struggle to break the chains of bonding 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 beginning the process of passing a constitutional amendment to protect slavery forever! What happened?

Let’s rewind 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 didn’t see a need to continue the exorbitant import taxes that seemed to only jack up price tags for Southern 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 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 held in South Carolina to get rid of these federal import taxes. The convention decided the tax was unconstitutional and authorized the governor to defy the enforcement of these taxes instituted by the national government. It seemed like a civil war was in the making. Mild tempers prevailed, however, and the Great Compromise of 1833 lowered import taxes over the subsequent few 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 commercial and manufacturing companies bullied into Congress new taxes that again oppressed Southern planters and made Northern manufacturers become rich. In 1850, John C. Calhoun, the South’s greatest exceptional spokesman, delivered a speech to Congress. It spoke of 3 wrongs done to the South that may 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 states as well.

The third, and really the only concrete grievance, concerned tax policy. In Calhoun’s eyes, national import taxes was a class legislation against the South. Heavy taxes on the South created money that was spent 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 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 really care about enslaved blacks, any more than they cared about the Native-American in the West or poor uneducated workers in factories. By and large many black slaves received better treatment and better compassion than their counterparts in the North. Lincoln, in fact, assured Southern slave-owners that fugitive slaves would be caught. The Congress and then the Supreme Court (Dred Scott decision) continually acknowledged that slavery wasn’t going anywhere.

But, right as Lincoln was elected and Congress assembled in 1861, they enacted more high import tariffs. Slavery wasn’t the problem – higher import taxes were. In his inaugural address Lincoln stated he would go get the customs in the South even if there was a secession!

Fort Sumter, near the entrance of the Charleston Harbor, began filling with Union troops to enforce the collection of the new taxes. The Civil War began in 1861 when South Carolinians shot at the federal garrison at Fort Sumter. The inevitable had been stewing for years – but it wasn’t about the slaves. It was over taxes.

Two years later, Lincoln issued the Emancipation Proclamation, and then only following several military battles, as a last resort to rally the North behind a worthwhile cause. With respect to the slave issue – the majority of the North didn’t care much about black people in bondage, any more than they cared about Indians in the west or impoverished illiterate workers in the factories. Ironically, most 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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