Tax and financial advice from the Silicon Valley expert.

No taxation without representation!

On December 16, 1773, in Boston, Massachusetts, American colonists dumped 342 crates of tea in Boston Harbor to protest a tax on tea and the monopoly of the British East India Company on the tea trade.

The Boston Tea Party is an example of the tradition of resisting tyranny and defending human rights in America.

The English Parliament believed it had the authority to impose a tax on the residents of its American colonies. It relented and eliminated taxes previously imposed under the Stamp Act and the Townshend Acts. The Tea Act was passed on May 10, 1773, principally to bail out the British East India Tea Company, which was on the edge of bankruptcy after experiencing financial setbacks in India.

Parliament didn’t expect any resistance, because the tax was only three pennies per pound of tea (remember a penny was worth something back then), because the tea would be much cheaper than any alternative, including the tax.

American colonists resented the tax, because they had no representation in Parliament. They declared, “No taxation without representation!”

On November 29, 1773, Samuel Adams invited “every friend to his country, himself, and posterity” to attend a meeting at Boston’s Faneuil Hall to discuss how to best face this threat to American liberty. 5,000 out of a total population of 16,000 attended the meeting.

When Governor Hutchinson refused an appeal by the owner of the ship, Dartmouth, to return to England, members of a crowd proceeded to the ships to dump the tea.

The Boston Tea Party was one of a series of events that led to the American Revolution and, eventually, the United States Constitution.

Today, many Americans, including (Republican) Senator Paul Ryan, are expressing outrage that President Trump is imposing worldwide tariffs by Executive Order, without enabling legislation being enacted in Congress. (Remember tariffs aren’t paid by foreign exporters, but by United States importers, and are likely to be passed through to consumers.)

Under the United States Constitution, the “power of the purse”, including enacting tax legislation, is supposed to reside in Congress. Tax legislation is initiated in the House of Representatives to assure representatives close to their constituents will debate tax proposals. Although U.S. Presidents have imposed tariffs in the past, they have been targeted to certain imports, not broad based tariffs on virtually every country in the world.

President Trump has “paused” most of his proposed tariffs for 90 days, except a 10% tariff on all imports and a 145% tariff on imports from China. China has imposed a retaliatory tariff of 125% on imports from the United States.

Trade between the United States and China has virtually stopped.

President Trump claims to have the authority to impose broad-based tariffs because he has declared a national emergency under the International Emergency Act. (The power to impose tariffs isn’t specifically stated in the International Emergency Act.)

Also, the current situation it doesn’t seem to be a sudden, unforeseen crisis that Congress cannot act quickly or flexibly enough to address that is a true emergency. Although Congress has been debating whether to adopt a resolution declaring there is no emergency, it seems the Republican majority will support President Trump and won’t adopt the resolution.

A dozen states, including Oregon, Arizona, Colorado, Connecticut, Delaware, Illinois, Maine, Minnesota, Nevada, New Mexico, New York and Vermont, have filed a joint lawsuit in the U.S. Court of International Trade in New York to stop President Trump’s tariff policy, saying it is unlawful and has brought chaos to the American economy. We’ll eventually find out what the courts say and, if they rule against President Trump, whether he follows their ruling.

We are already seeing large protests across the United States. If President Trump’s tariff policies continue, existing inventories of imported goods will be exhausted and American consumers will find they can’t find the clothing, toys, sports equipment, furniture and other imported products they are accustomed to buying on the shelves, which could lead to bigger crowds at protests and Town Hall meetings.

More unhappy voters seem to increase the possibility of “flipping” seats in Congress in the 2026 mid-term election and the Republicans losing their control of the House of Representatives.

Will Christmas be cancelled this year?

(What about back-to-school shopping?)

Maybe you should take care of back-to-school and holiday shopping now, while retailers have merchandise to sell.

Toymakers, children’s shops and specialty retailers have paused orders for the winter holidays in response to President Trump’s 145% tariff on imports from China.

Almost 80% of all toys and 90% of Christmas decorations sold in the United States are made in China.  97% of clothing sold in the United States is imported, with about 27% imported from China.

Shipments from China have virtually stopped.

Retailers need to place their orders several months in advance in order for merchandise to arrive in time for the holiday season.

Unless President Trump relents on his tariff proposals, there might be very few items on the shelves of retailers for back-to-school and holiday shopping.

Since most retailers earn their profits during the holiday season, the retail outlook for 2025 seems bleak.  Some retailers are consulting bankruptcy attorneys.

The United States Senate voted down a Democratic resolution to block the tariffs, 49 – 49, on April 30, 2025, so the decision is now solely President Trump’s.

(San Jose Mercury News, May 1, 2025, Section A, p. 3, “Senate votes down resolution to block Trump’s global tariffs”, Section C, P. 9, “Retailers fear tariffs will affect Christmas toy sales.”)

Tax and financial advice from the Silicon Valley expert.