Stamp act

A stamp act is any legislation that requires a tax to be paid on the transfer of certain documents. Those that pay the tax receive an official stamp on their documents, making them legal documents. The taxes raised under a stamp act are called stamp duty. This system of taxation was first devised in the Netherlands in 1624 after a public competition to find a new form of tax. A variety of products have been covered by stamp acts including playing cards, dice, patent medicines, cheques, mortgages, contracts, marriage licenses and newspapers. The items often have to be physically stamped at approved government offices following payment of the duty, although methods involving annual payment of a fixed sum or purchase of adhesive stamps are more practical and common. Stamp acts have been enforced in many countries, including Australia, People's Republic of China, Canada, Ireland, India, Malaysia, Israel, the United Kingdom and the United States of America.

After Great Britain was victorious over France in the Seven Years' War (known in America as the French and Indian War), a small Stamp Act was enacted that covered of all sorts of documents from newspapers to legal documents, and even playing cards. Great Britain was taxing the colonial population to raise revenue, but the Americans claimed their constitutional rights were violated, since only their own colonial legislatures could levy taxes.^[1] Across the American colonies, opposition to the tax took the form of violence and intimidation. A more reasoned approach was taken by some elements. James Otis, Jr. wrote the most influential protest, The Rights of the British Colonies Asserted and Proved. Otis, the radical leader in Massachusetts, convinced the Massachusetts assembly to send a circular letter to the other colonies, which called for an inter-colonial meeting to plan tempered resistance to new tax. The Stamp Act Congress convened in New York City on October 7, 1765, with nine colonies in attendance; others would likely have participated if earlier notice had been provided. The delegates approved a fourteen-point Declaration of Rights and Grievances, formulated largely by John Dickinson of Pennsylvania. The statement echoed the recent resolves of the Virginia House of Burgesses, which argued that colonial taxation could only be carried on by their own assemblies. The delegates singled out the Stamp Act and the use of the vice-admiralty courts for special criticism, yet ended their statement with a pledge of loyalty to the King.

The Stamp Act Congress was another step in the process of attempted common problem-solving, which had most recently been tried in the Albany Congress in 1754. That earlier meeting had been held at the urging of royal officials, but the later one was strictly a colonial affair. The congress was a forum for voicing constitutional concerns, not a rallying point for revolution and independence. In fact, the meeting afforded the more conservative critics of British policy some hope of regaining control of events from the unruly mobs in the streets of many cities.

English and United Kingdom Stamp Acts

Stamps Act 1694

A stamp duty was first introduced in England in 1694 following the Dutch model as An act for granting to Their Majesties several duties on Vellum, Parchment and Paper for 10 years, towards carrying on the war against France (5 & 6 Will. & Mar. c. 21).^[2] The duty ranged between 1 penny to several shillings on a number of different legal documents including insurance policies, documents used as evidence in courts, grants of honour, grants of probate and letters of administration. It raised around £50,000 a year and although it was initially a temporary measure, it proved so successful that its use was continued.

Stamp Act 1712

Stamp Act 1765

The Stamp Act 1765 (short title Duties in American Colonies Act 1765; 5 George III, c. 12) was a direct tax imposed by the British Parliament on the colonies of British America. The American colonies were furious and refused to pay for the tax that the British put on them. The Americans in all thirteen colonies protested strongly and the British retreated part way, but insisted on the right of Parliament to tax the colonies. The Americans rejected that as unconstitutional—declaring "No Taxation without Representation"—and it was a major grievance that led to the American Revolution. The act required that many printed materials in the colonies be produced on stamped paper produced in London and carrying an embossed revenue stamp.^[3][4] These printed materials were on every legal document, magazine, newspaper and many other types of paper used throughout the colonies. Unlike previous taxes, the stamp tax had to be paid in valid British currency, not in colonial paper money. The purpose of the tax was to help pay for troops stationed in North America after the British victory in the Seven Years' War. The British government felt that the colonies were the primary beneficiaries of this military presence, and should pay at least a portion of the expense. The Americans saw no need for the troops or the taxes; the British saw colonial defiance of their lawful rulers.^[5]

The Stamp Act met great resistance in the colonies. It managed to offend virtually every colonist. The colonies sent no representatives to Parliament, and therefore had no influence over what taxes were raised, how they were levied, or how they would be spent. Many colonists considered it a violation of their rights as Englishmen to be taxed without their consent—consent that only the colonial legislatures could grant. Colonial assemblies sent petitions and protests. The Stamp Act Congress, held in New York City, reflected the first significant joint colonial response to any British measure, and also petitioned the Parliament and the King. Local protest groups, led by colonial merchants and landowners, established connections through correspondence that created a loose coalition that extended from New England to Georgia. Protests and demonstrations initiated by the Sons of Liberty often turned violent and destructive as the masses became involved. Some opponents of the Stamp Act distinguished between "internal" taxes like the stamp duty, which they claimed Parliament had no right to impose, and revenue legitimately raised through the regulation on trade. Since Americans were unrepresented in the House of Commons, "No taxation without representation" became their rallying cry. A word used frequently by colonists was "liberty" during the Stamp Act. Opponents of the new tax staged mock funerals in which "liberty's" coffin was carried to a burial ground. They insisted that liberty could not be "taken away without consent."^[6]

Stamp Duties Management Act 1891 and Stamp Act 1891

All the above Acts were superseded by the Stamp Duties Management Act 1891 and the Stamp Act 1891, which still constitute the bulk of UK law on stamp duties today.

The modern UK Stamp Act

From 1914 to 1928, the Director of Stamping at the Stamp Office oversaw the production of Treasury Notes (a type of banknote, not to be confused with US Treasury notes). These were issued for denominations of £1 and 10's to enable coins to be removed from circulation, and were not convertible to gold. Existing Bank of England banknotes in higher denominations continued to circulate alongside the Treasury Notes. In 1963 production of postage stamps passed to the General Post Office.

The Finance Act 1986 introduced Stamp Duty Reserve Tax. From October 27, 1986, the charge was imposed on 'closing' transactions at the London Stock Exchange which until then had been transactions where no document was used and therefore exempt from Stamp Duty.

A public display of Stamp Office artifacts and records was held at the Courtauld Institute in 1994 to commemorate the three hundredth anniversary of the introduction of UK Stamp Duty. The Stamp Office was also awarded the Charter Mark by John Major's Advisory Committee as a reward for its public service.

Stamp duties are the oldest taxes still raised by the HM Revenue and Customs.

References

Further reading

• Dagnall, H. (1994). Creating a Good Impression: three hundred years of The Stamp Office and stamp duties. London: HMSO. ISBN 0116414189.