Editor’s note: Mark Bushnell is a Vermont journalist and historian. He is the author of “Hidden History of Vermont” and “It Happened in Vermont.”
[I]f only death and taxes are inevitable, this is the time of year when many people give death serious consideration.
It’s not just the financial burden of taxes that drives people to despair; it is the language. The federal tax booklets are riddled with everyday terms like “Form RRB-1099,” “Coverdell ESA Distribution,” or “Archer MSA Deduction.” What? Unsure what these terms mean? The booklets helpfully refer you to “Pub. 535” or “Pub. 590” or that page-turner “Pub. 915.”
It’s enough to make even the bravest taxpayer cry.
But in many ways things are no worse than when Vermont came into existence, if that is any consolation, which I doubt.
The state owes its very origin to a couple of tax disputes. First, there was the colonists’ complaint about the high English taxes they paid though they had no say in government, which they expressed succinctly as “no taxation without representation,” a sort of meme of its day.
And then there was the clash between New York colonial officials and the settlers of what today is Vermont. The New Yorkers claimed Vermont as part of their territory and began demanding that settlers pay for title to the land they occupied. Sounds reasonable, right? Sort of like the property transfer tax we pay today. The problem was that the settlers had already paid New Hampshire for their titles, and those fees were much lower than the ones demanded by New York, which should give you some idea why Ethan Allen and the other Green Mountain Boys hated New Yorkers about as much as they despised the British.
When the colonies declared their independence, Vermont leaders took the opportunity to do likewise. Vermonters elected a legislature to run the newly proclaimed republic. Those lawmakers, meeting in Windsor more than 240 years ago, did what all legislatures do: they approved a tax. It’s hard to organize a cohesive society without money. Plus, they had a war to fund and fight. (The first federal tax wouldn’t come until 1798, seven years after Vermont joined the Union, so in a sense the state got a free ride for a few years.)
The state tax system was simple compared to today’s convoluted tax code. Town officials, dubbed listers, warned residents sometime each May that they were to present in writing “a true account of all their listable polls and all their rateable estate” that they possessed as of June 20 of that year. That meant each household had to produce a list of its eligible voters (i.e. adult males) and certain taxable property, chiefly livestock and cash.
This was long before the days of progressive taxation, so everything was taxed at a flat rate. Each male between the ages of 16 and 60 cost a household six pounds (in the days before the U.S. dollar). Ministers, the president and tutors of the state college, full-time schoolteachers, students, and those too incapacitated to pay were exempted.
Livestock were taxed based on their age, with mature animals costing more. A 4-year-old ox or steer, for example, would cost four pounds in taxes, whereas a 3-year-old steer or heifer would cost three. Cash on hand would cost six pounds for every 100 pounds a person possessed.
Lawyers, perhaps because they didn’t earn their livelihoods from livestock, were charged based on how successful their practices were. By law, even the poorest of lawyers were taxed 50 pounds.
Early tax forms could be quite simple. I have to admit that when I saw one at the Vermont Historical Society Library in Barre, pangs of jealousy shot through my chest. The paper, dating from 1815 and measuring roughly five by seven inches, stated simply that the taxpayer had no taxable property except for a single silver watch.
As easy and friendly as these tax forms seem, tax collecting in Vermont had its tough side. If you couldn’t pay your tax bill, you might be imprisoned until you could – even then tax law could be perversely illogical.
And if you were caught cheating on your taxes by underreporting your possessions, watch out. You wouldn’t be jailed, but the taxes due on any omitted items would be four times the normal rate. Listers had a strong incentive to collect these extra taxes, they got to keep half of them.
It didn’t hurt to befriend a lister, since he had the power to declare that the exclusion of taxable property from a list had been accidental. If a lister doubted that a taxpayer had declared all the cash he owned, the lister could demand that he swear under oath that he was telling the truth. The oath was considered sufficient proof that the taxpayer wasn’t lying. That might seem inadequate, but given the rarity of an IRS audit these days, we work under a similar system.
Early Vermonters no doubt complained about their taxes, though – people always do – but they were lower than those imposed by other New England states because of an idea hatched by Ethan Allen’s brother, Ira, the state’s first treasurer.
Allen proposed seizing and selling the property of anyone who hadn’t supported Vermont during the Revolution. “(T)hose who joined the British were benefactors of the State,” he crowed, “as they left their property to support a government they were striving to destroy.”
Low taxes drew a stream of settlers to Vermont until other states began confiscating and selling property, too.
But the state’s relatively light tax burden didn’t stop people from complaining. In a letter dated Oct. 3, 1797, New Hampshire resident George Jaffrey wrote to James Whitelaw of Ryegate, the regional tax assessor, to complain about losing 3,000 acres of Vermont land in a tax sale to cover what had been a small debt. You can almost hear Jaffrey sputter with anger as he rails against “(t)he acts of the Government of that State (that) seem calculated to deprive the non-resident Proprietors of their rights of their lands in the State, and the iniquitous conduct of the Collectors of selling a whole right in a Township for a Small Tax, which a few acres in a Lot would pay …”
He goes on to complain that he never even knew he owed the tax, because Vermont never advertised the fact in a New Hampshire newspaper.
John W. Burke summed up the almost-universal aversion to paying taxes in a letter to Whitelaw in 1805. Unable to pay more than $30 toward his property tax bill for land he owned in Groton, he promised Whitelaw he’d pay the balance “as soon as it comes to hand.” Then, perhaps paraphrasing economist Adam Smith, Blake writes that “this system of taxation is really, as Smith says, tantamount to confiscation.”
