Years ago, I worked as a congressional staff member on the U. S. budget.  Based on that experience I was invited to teach a graduate course on the U. S. budget at the local college. I was to teach about the American budget and tax law.

Teaching about the U.S. budget is challenging, because the federal budget isn’t a budget at all. It isn’t legislation. The budget is a resolution–a philosophical statement of priorities- a sort of wish list.  In contrast, Congress raises revenue and spends it through appropriations bills and tax laws. By the time tax and appropriations committees complete their work, not much is left of the original proposed budget resolution.

The U. S. Capitol where the Congress Meets


The First Legislature and the First Finance Laws in North America

To teach the course I had to decide where to begin.  Since I’d been swamped by research on early Virginia (see The Wealth of Jamestown and The Wealth of Virginia), I turned to my notes on the first House of Burgesses.  Meeting in 1619, before the Mayflower sailed, this was the first legislative body in English-speaking North America.

According to a “great charter” designed to end military rule and establish civilian government for the colony, two burgesses were elected from each of eleven settlements.  They met in the only building sufficient in size to hold them, a small wooden Anglican church in Jamestown. The graves of four early Virginia leaders were recently found at this location.


Budget and Tax Actions of the First House of Burgesses

People interested in history are very fortunate; the first House had a speaker who evidently never said anything, but kept notes on the first meeting.  The first burgesses convened on July 30, 1619, an inauspicious choice for an opening day in Virginia.  It was so hot that one of the burgesses died of heat stroke.

The assembly adopted the provisions of the great charter, which stated that “And that they might have a hand in governing themselves,…a general assembly should be held yearly once, whereas to be present the governor and council with two burgesses from each plantation freely to be elected by the inhabitants thereof; this assembly to have the power to make and ordain whatsoever laws and orders should by them be thought good and profitable for the colony’s subsistence.”

For three days, the assembly converted various Virginia Company of London regulations into laws. For example, they adopted rules for land tenure, and considered proposals for bettering relations with the Powhatan Indians. They established the Anglican faith as the official religion of the colony.  Importantly, every burgess gained the right to initiate legislation.  Above all, the body decided it was to govern the colony, and not simply pass laws proposed by the company and/or the governor.


The First Spend and Tax Bills

To govern the colony the assembly decided to consider a sort of budget.  Their new rules and regulations came with a price tag and the assembly believed in balanced budgets. Consequently, to cover its own costs, the assembly decided to raise revenues. The assembly debated the first American budget and tax law.

Virginia in 1619 had no currency and no banks. Tobacco was the medium of exchange in the colony .  Factors (wholesalers) who bought and sold tobacco in the international market set the price of tobacco,. which varied according to market conditions. Meanwhile Virginia tobacco already was being shipped to Europe on a regular basis.

Tobacco in the Field


On the fourth and last day of the assembly, the burgesses passed the first North American tax law.  This required that every man and servant older than sixteen pay one pound of their best tobacco to the colony to pay for the services provided by the assembly’s speaker, clerk, and sergeant-at-arms during the legislative session.

The First Tax Dispute and the First Labor Strike

Two burgesses were denied their seats in the first assembly.  These were Polish glass makers and operators of the only manufacturing enterprise in the colony.

Colonial Blown Glass

The Poles were not English-speaking and not Anglican; they were Catholic. The Poles promptly called a labor stoppage.  Today, we’d call it a strike.  Only after they’d been granted their right to vote did they go back to work. They also agreed to train people in the craft of glassmaking. Under this agreement, the Poles became subject to taxation.

This was how government finance and the budget began in Virginia : the first American budget and tax law went into effect.

An Old Accounting Joke

Spending and taxes have always required accountants, and jokes about accountants are very old.  Here is one:

“A man piloting a hot air balloon discovers that he has wandered off course and is hopelessly lost. He descends to a lower altitude and locates a man on the ground. He lowers the balloon further and shouts, “Excuse me, can you tell me where I am?”

The man below says, “Yes, you are in a hot air balloon, about thirty feet above this field.”

“You must be an accountant,” says the balloonist.

“Yes, I am,” replies the man. “And how did you know that?”

“Well, says the balloonist, “what you tell me is technically correct, but of no use to anyone.”

The man below says, “You must be a manager.”

“Well, yes I am,” replies the balloonist. “How did you know?”

“Well, says the accountant, “you don’t know where you are, or where you’re going, but you expect my immediate help. You’re in the same position you were before we met, but now it’s my fault.”