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Eighteenth century England took its hat tax seriously
Most Americans are well aware that our founding fathers were not too keen on the taxing policies of the British government.
One draconian measure passed by Parliament in 1784 during the reign of George III was the Hat Tax.
The tax was designed to be a simple way of raising revenue for the government in rough accordance with each person’s relative wealth. The assumption was made that the rich had a large number of expensive hats, while the poor might have had one cheap hat or none at all.
To be a bona fide hat seller, an individual had to obtain a license to sell hats. The license cost two pounds in London, and five shillings outside London. In addition, sellers had to have the words “Dealer in hats by retail” over the door of their premises.
Special stamps had to be affixed to the lining or inside the crown of the hats to make them “legal.” The cost of the duty depended on the cost of the hat.
For hats with a retail cost under four shillings, the duty was threepence. For hats costing between four and seven shillings, sixpence was levied. A shilling was charged for those between seven and twelve shillings. For really expensive hats over twelve shillings, the duty was two shillings.
There were penalties for both the seller and the buyer of hats without stamps, and the removal and reuse of stamps was a punishable offense. The penalty for forgery of hat stamps was particularly severe.
In 1798, an unlucky Brit named John Collins was caught with a forged printing plate, ready inked, and a dampened linen ready to receive its impression. Ink he had just wiped from the surface of the plate was on his hands. Unbelievably, Collins was sentenced to death.
Apparently, Americans won their independence in the nick of time. Who knows how much the tax would have been on coonskin caps?
“I object and take exception to everyone saying that . . . Congress [is] spending money like a drunken sailor. As a former drunken sailor, I quit when I ran out of money.” – Bruce L. Hargraves, U.S. Navy, retired
The technical information here is necessarily brief. No final conclusion on these topics should be drawn without further review and consultation. Please be advised that, based on current IRS rules and standards, the advice contained herein is not intended to be used, nor can it be used, for the avoidance of any tax penalty assessed by the IRS.
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