Adam N. Michel and Joshua L. Loucks
The American Revolution was not merely a tax revolt over consent; it was a rebellion against a system of taxation that was punitive, discriminatory, and enriching special interests. Many popular accounts of taxation and the American Founding focus on the consent of the governed, focusing narrowly on the Declaration of Independence’s grievance, “For imposing Taxes on us without our Consent.”
Our chapter in the new book, A History of Repeated Injuries, argues that the standard understanding of taxes at the founding glosses over a richer story with implications for fiscal systems today. If English taxes hadn’t been discriminatory, a revolt over taxation without consent might never have happened.
Far from a revolt over taxes being too high, the colonists’ Tea Party was a protest against a targeted tax cut. By exempting the British East India Company from taxes on tea, Parliament undercut domestic sellers to create a tax-subsidized monopoly. The colonists revolted, throwing the company’s tea into the harbor. The Boston Tea Party was more a protest against a corporate bailout than a broadly burdensome fiscal system.
In 1763, the average British citizen paid about 26 shillings a year in taxes. The average New England colonist paid about one shilling, and many understood that taxes would have to rise if the independent colonies were to fund their own defense. In addition to other grievances, we rebelled over the way taxes were imposed, not the size of the bill.
War debts forced the young states to raise domestic taxes to pay bondholders, and it was widely understood that government debt enriched the wealthy urban elites who held the bonds. The taxes that funded repayment, meanwhile, fell disproportionately on poorer rural farmers. The result was resentment and repeated violent rebellion. Yet the protesters went out of their way to make clear they were objecting to the inequities of the tax design, not the principle of raising revenue in general.
This is not a uniquely American conclusion. A recent empirical assessment of the French Revolution found that unrest was concentrated on the high-tax side of France’s internal fiscal borders and was strongest where fiscal disparities were largest. The authors conclude that the discontent that toppled the monarchy “was fueled not only by tax levels but also by how inequitable the system appeared.”
Similar tensions played out in debates between anti-Federalists and the Federalist supporters of the new Constitution, which included language intended to ensure uniform treatment under the law, including tax law. The widely held concern that taxes could become oppressive, in both magnitude and design, led to constitutional safeguards. Unfortunately, these protections were insufficient to keep the anti-Federalists’ warnings of an increasingly intrusive federal fiscal system from materializing with the introduction of the Sixteenth Amendment and the modern income tax.
Two hundred and fifty years ago, the Founders taught us something simple: a tax system earns consent when it treats people equally, and it invites discontent when it doesn’t. We’ve drifted a long way from that standard. Today’s tax code is a sprawling instrument of privilege and punishment. Just look at the two most recent large tax bills passed by Congress. The Inflation Reduction Act included a trillion dollars in energy subsidies for politically connected industries, and the One Big Beautiful Bill Act added a dozen new carve-outs that reward important political constituencies at the expense of everyone else.
The challenge today is not simply to lower taxes but to design a system that is transparent, neutral, broad-based, and resistant to political manipulation. That system is a flat consumption tax.
