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Taxing Tea - A British TraditionCopyright © 2008 Jon M. StoutWhile British citizens likely saw the first importations of tea from the Orient in the 1500 to 1600s as a sensation that added a little spark to their traditional coffee houses, the government saw something else - money. As this beverage quickly became the favored choice of the lower classes, British nobility saw a way to line the coffers of government. The Arrival Of Tea And The First Tea Taxes The exact date of tea's arrival on British shores is a bit murky. What is clear, however, is that by the late 1600s, tea was a very popular drink in this country. Coffee houses began serving this beverage in abundance alongside more traditional beverages. By 1700, it is believed that more than 500 coffee houses within Britain served tea and even saw sales of spirits decline in favor of tea's lighter, sweeter, non-alcoholic taste. Not wanting to lose the valuable source of revenue that taxes on liquor sales produced, the government went into action. By 1676, a tea tax and coffee house licensing act were put into place. As tea's popularity continued to rise, so did the attempts of the British government to make money off this import. During the mid 18th century, the government raised duties on tea so much that they fell in around a whopping 120 percent! While taxation and import duties did little to curb Britons' craving for tea, they did give rise to an illegal black market. Tea traders from the Netherlands and Scandinavian countries began smuggling loads of tea into the country to help Brits enjoy their tea duty free. The cost of doing business on the black market did remain high. So high, in fact, that smugglers often cut their tea with other substances to make their precious cargo go farther and fetch more money. The smuggling crisis came to an abrupt end in 1784 when the Commutation Act was introduced. This act effectively dropped the tea tax to a more manageable rate of about 12.5 percent. It wasn't until 1875, however, that government regulations were put into place to stop the cutting of tea with other substances thanks to the Food and Drug Act. While tea taxes were effectively brought under control in Britain, there were other locations that faced taxation from this government. With the rise of the American colonies came a whole new source of revenue. Tea Taxes In America As British settlers poured into the colonies hoping to make new lives for themselves, they brought many traditions with them. Tea drinking was just one of them. This tradition, however, would soon play a pivot role in the founding of a new nation. The first tea taxes in America are believed to have come about in 1767 when Parliament set a three-pence a pound tax on imports of tea to the American colonies. At this time, however, the American tea tax was still a great deal lower than the fees Brits faced back in the Mother country. It would still be nearly two decades before the Commutation Act passed. America's tea taxes were less at the time due to concessions made to the East India Company by Parliament. What exactly happened behind closed doors that gave the colonists preferential pricing at the time remains a mystery to historians. Whatever the case, colonists did enjoy their tea at a lower price than their compatriots back at home had to pay. Some believe the lower duties and taxes in America were designed to make it easier for the East India Company to compete effectively against other importers, such as the Dutch. Unfortunately for taxpayers, both the company and the British government would soon find themselves facing debts that were out of control. Following the French and Indian War, which left Britain largely in control of North America, the British government's debts soared. It is estimated that government debt climbed from around 75 million pounds to more than 130. To recover some of its expenses, Great Britain enacted a series of taxes on the American colonists. Charles Townshend's 1767 tax on tea, paper, paint and other supplies was just one of many taxes enacted following the war. By 1773, Parliament approved of the Tea Act, which was created to help the East India Company stay afloat. This act gave the company control over tea sales in the colonies. Thanks to a large surplus of tea in London warehouses, the company prepared to deliver thousands of pounds of tea for sale in the colonies at prices that would put many local merchants and especially smugglers out of business. The tea tax, however, remained in place - much to the chagrin of American settlers, who were fed up with British taxes. Seeing the tea tax as an unfair duty and angered at the preferential treatment given to the East India Company, many colonists began to rally for their rights. As the low-priced shipments of tea came into the colonies, many locations refused to allow the cargo to be offloaded. In Boston, the infamous Tea Party took place as a load of cheap tea sat in Boston Harbor. While the Tea Act of 1773 would have given the American colonists much cheaper tea - even with the tea tax included - colonists felt agreeing to pay the price meant giving up rights to representation. This was not about to happen in the eyes of such patriots as Sam Adams. And, as the saying goes, the rest is history. The British and tea have been synonymous for centuries. Taxes on this import, however, proved to be the straw that broke the proverbial camel's back and led to the founding of a whole new country. About The Author:
*** Digital Reprint Rights *** *** Author Notification *** We ask that you notify the author of publication of his or her work. Jon M. Stout can be reached at: jon.stout@GoldenMoonTea.com *** Print Publication Reprint Rights *** If you desire to publish this article in a PRINT publication, you must contact the author directly for Print Permission at: jon.stout@GoldenMoonTea.com
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