Samantha Pahlow, CTFA, AWMA
Wealth Management Chair Executive Vice President

American Ledger: A 250-Year Financial Perspective

With our country reflecting this summer on the Spirit of '76, our team recounts how 2026 economic themes have evolved from our founding days.

Every Fourth of July, Americans tell themselves a familiar story: Our country was born in a tax revolt. The Boston Tea Party, “no taxation without representation,” and patriots dumping crates into the harbor, all add up to a tidy origin story in which our forebears rose up because they were taxed too much.

The truth is more interesting and useful for anyone thinking carefully about money today.

The Colonists Weren’t Actually Overtaxed

Here is the fact that surprises almost everyone. On the eve of the Revolution, American colonists were lightly taxed compared with people in Great Britain. According to the National Bureau of Economic Research, historians estimate that the average person in Great Britain paid roughly 26 shillings a year in taxes. In certain parts of Colonial America, the comparable figure was closer to one shilling.

So the Revolution was not, at its heart, a protest against a crushing tax bill. The grievance was largely about consent. Colonists objected to being taxed by a Parliament in which they had no direct representation, and to the precedent it set: the concern that a body willing to tax them without their say would not stop on its own.

“No taxation without representation” was not primarily an argument about the size of the tax. It was an argument about who decides.

A Completely Different Machine

If a colonist from 1776 could see a modern tax return, almost none of it would make sense. In 1776 there were no income taxes, no corporate taxes and no payroll taxes. The British government relied heavily on customs duties and excise taxes, while colonial governments also used local taxes such as property and poll taxes (which were abolished in 1964).

In the decades after independence, tariffs supplied the overwhelming share of U.S. federal revenue — roughly 90% in the early republic. In fiscal year 2025, even after recent tariff increases, customs duties accounted for about 3.7% of today’s total federal receipts.

The modern federal income tax didn’t take shape until after the Sixteenth Amendment was ratified in 1913. Much of the federal tax architecture most of us organize our financial lives around, from withholding to capital gains to the estate tax, is relatively young in historical terms. It’s a useful reminder that the tax code is not a law of nature. It is a human-made system, rewritten again and again, and it will likely continue to change in our lifetimes.

What Endures

While the specifics have changed beyond recognition, the founding insight has aged remarkably well. What matters most about taxes is not just what you pay, but whether you have a voice in the process.

That is a meaningful insight to bring to your own financial life. You cannot redraft the tax code. But within your own plan, you may have more agency than you realize. Tax-aware investing, thoughtful asset location, charitable strategies, Roth conversions, the timing of gains and losses, and estate and gifting decisions are not a literal stand-in for a seat in the legislature. They do, however, represent a proactive approach to how your money is treated.

They are the difference between simply reacting to a tax bill and making informed decisions that may help manage tax exposure over time.

That means having a plan, along with partners who can help you understand it, question it and shape it deliberately.

That, more than any fireworks display, feels like the right way to honor where we started.

Disclosures

The views expressed represent the opinion of Ferguson Wellman. The views are subject to change and are not intended as a forecast or guarantee of future results. This material is for informational purposes only. It does not constitute investment advice and is not intended as an endorsement of any specific investment. Statements of future expectations, estimates, projections and other forward-looking statements are based on available information and Ferguson Wellman’s views as of the time of these statements. Past performance may not be indicative of future results. Ferguson Wellman, Octavia Group and West Bearing do not provide tax, legal, insurance or medical advice. This material has been prepared for general educational purposes only and not as a substitute for qualified counsel who can determine how this information applies to you. We believe the information provided is from reliable sources but should not be assumed accurate or complete.

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