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Several sources have commented that the Boston tea party was about a tax cut not a tax raise.

http://www.taxhistory.org/thp/readings.nsf/ArtWeb/1BB0C8F894BB490B852577020083A6F6?OpenDocument

"The Boston Tea Party was certainly a tax protest, but it was not a protest against high taxes. In fact, it was sparked by a tax cut, not a tax hike."

http://www.dailyfinance.com/2010/04/15/tea-party-movement-confused-about-taxes-and-the-boston-tea-party/

So which one is it?

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TL;DR: it was MOSTLY about British government's control and deliberate encroachment on colonial rights. The tax increase was merely one of the more visible manifestations of that control, but not the most hated or impactful (granting the monopoly on tea to BEIC was the main economic one; and forcing the colonial officials to be paid for by the British government the main political one).

This dovetails with the modern Tea Party movement pretty closely - their MAIN beef is overarching government control. While the most visible manifestation of that control are, again, taxes, the movements main rallying political points were NOT taxes per se, but Too-Big-To-Fail Big Finance bailouts (TARP) as well as Obamacare, which drastically increases the influence of the government in people's lives.


Details:

The actual tea dumping event in Boston was about neither tax cut or tax raise per se, though the overall political movement was about the raise. All cites from Wikipedia, which covers it to a great extent with multiple references:

The protest movement that culminated with the Boston Tea Party was not a dispute about high taxes. The price of legally imported tea was actually reduced by the Tea Act of 1773. Protesters were instead concerned with a variety of other issues.

  • The familiar "no taxation without representation" argument, along with the question of the extent of Parliament's authority in the colonies, remained prominent.

  • Some regarded the purpose of the tax program — to make leading officials independent of colonial influence—as a dangerous infringement of colonial rights. This was especially true in Massachusetts, the only colony where the Townshend program had been fully implemented.

...

Colonial merchants, some of them smugglers, played a significant role in the protests. Because the Tea Act made legally imported tea cheaper (DVK's note - this had NOTHING to do with tax lowering, and had to do with government granted monopoly), it threatened to put smugglers of Dutch tea out of business. Legitimate tea importers who had not been named as consignees by the East India Company were also threatened with financial ruin by the Tea Act. Another major concern for merchants was that the Tea Act gave the East India Company a monopoly on the tea trade, and it was feared that this government-created monopoly might be extended in the future to include other goods.

However, the main story of the tax related sentiment that led up to Boston Tea Party and the issues with Parlament's actions was also about previous raising of taxes and more importantly, of Parlament's control:

In 1767, to help the East India Company compete with smuggled Dutch tea, Parliament passed the Indemnity Act, which lowered the tax on tea consumed in Great Britain, and gave the East India Company a refund of the 25% duty on tea that was re-exported to the colonies. To help offset this loss of government revenue, Parliament also passed the Townshend Revenue Act of 1767, which levied new taxes, including one on tea, in the colonies. Instead of solving the smuggling problem, however, the Townshend duties renewed a controversy about Parliament's right to tax the colonies.

...

... Eliminating some of the taxes was one obvious solution to the crisis. The East India Company initially sought to have the Townshend duty repealed, but the North ministry was unwilling because such an action might be interpreted as a retreat from Parliament's position that it had the right to tax the colonies.

  • More importantly, the tax collected from the Townshend duty was used to pay the salaries of some colonial governors and judges.

  • This was in fact the purpose of the Townshend tax: previously these officials had been paid by the colonial assemblies, but Parliament now paid their salaries to keep them dependent on the British government rather than allowing them to be accountable to the colonists

... and, regarding Tea Act itself:

The Tea Act retained the three pence Townshend duty on tea imported to the colonies. Some members of Parliament wanted to eliminate this tax, arguing that there was no reason to provoke another colonial controversy. Former Chancellor of the Exchequer William Dowdeswell, for example, warned Lord North that the Americans would not accept the tea if the Townshend duty remained. But North did not want to give up the revenue from the Townshend tax, primarily because it was used to pay the salaries of colonial officials; maintaining the right of taxing the Americans was a secondary concern. According to historian Benjamin Labaree, "A stubborn Lord North had unwittingly hammered a nail in the coffin of the old British Empire."[

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  • beat me to it and wrote this up far better than I could have. – Ryathal Jun 19 '13 at 12:36
  • I agree that the ultimate cause of the protest was about who controlled the taxes (British parliament or the colonists - or at least who had a say). However, the original articles I mentioned indicate that the final trigger was about a corporate tax cut. So which source do I trust? That's why I would like to see other answers. – user1840 Jun 19 '13 at 12:42
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    @raxman - As I said. TARP. And it mostly wasn't due to tax cut to East India Company, but due to granted monopoly. – user4012 Jun 19 '13 at 12:43
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Neither.

In short, the Parliament decided that it would exempt the 18th century version of Halliburton, The British East India Company, from taxes that it was imposing on all other importers. The crown had a large investment in the BEIC and the company was losing money, partly because the colonists were not buying the Tea from them and instead were buying it from smugglers. So when the exemption was granted a few rebels snuck aboard the ships and destroyed the cargo.

It was about taxes in that the problem was that England was levying the tax on its competitors. But it was more about the government of England using taxes to discourage competition.

I think it is important to note:

the Tea Party was more or less ignored by proper Bostonians for almost half a century after it occurred. The event was too raucous, too uncontrolled to suit the conservative tastes of Boston's mercantile gentry.

What it did was set the Crown on tilt and forced them to react.

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  • 1
    Those are good comments. The reason this issue is important is that the modern day tea parties have a slogan "Taxed Enough Already". However, the sum of what led to the Boston Tea Party was not about the value of the tax (too high or too low) it was about who was decided the taxes. – user1840 Jun 19 '13 at 14:58
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    The TEA Party is borrowing on the symbolism it is not claiming to be the same thing. – SoylentGray Jun 19 '13 at 16:05
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    @DVK - I dont hate Bush. I also do not hate Haliburton nor do I hate the BEIC. The BEIC was a major force in the world with its fingers in pretty much every industry and it did for England what Haliburton does for the US today. It should be noted that Haliburton had already made more off of Government contracts at the time of the last election than it did in 8 years of GWB/Cheney. Haliburton is the only company that can do many of the things that it does. In that aspect Haliburton is the only analog to the BEIC. There is no attack here on anyone. – SoylentGray Jun 19 '13 at 19:43
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    @DVK In the context of this Q&A, the property of BEIC that matters is that they were a government affiliated company - Which actually makes Haliburton a better analog not worse. Haliburton is a US company and gets approval to perform work for foreign countries. Imagine the uproar today if Haliburton was granted an exemption to the Gasoline tax. – SoylentGray Jun 19 '13 at 19:55
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    @DVK - I have never said that it was. – SoylentGray Jun 19 '13 at 21:21
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Basically The East India Company got a tax break that made it cheaper for them to sell tea to the US than any other business. The tax hike came later.

Most Americans, including George Washington, opposed the "tea party" and regarded it as an act of vandalism. Benjamin Franklin and others even went so far as to say the East India Company should be compensated for the loss.

No the thing that really kicked off the revolution was Britain's reaction to the tea party. They closed the port of Boston and revoked the rights of self-rule in Massachusetts. Those acts galvanized Americans into rebellion and eventually the Revolutionary War.

The idea that a 3 1/2% tax increase on something most American regarded as sinful to consume as the driving force of a revolution is completely incorrect. Chances are most of the population didn't even notice the change in price.

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