In February 1765, Grenville escalated his revenue program with the Stamp Act, precipitating a major conflict between Britain and the colonies over Parliament’s right to tax. The Stamp Act imposed a tax on all paper used for official documents—newspapers, pamphlets, court documents, licenses, wills, ships’ cargo lists—and required an affixed stamp as proof that the tax had been paid. Unlike the Sugar Act, which regulated trade, the Stamp Act was designed plainly and simply to raise money. It affected nearly everyone who used any taxed paper but, most of all, users of official documents in the business and legal communities. Anticipating that the stamp tax would be unpopular—Thomas Hutchinson had forewarned him—Grenville delegated the administration of the act to Americans to avoid taxpayer hostility toward British enforcers. In each colony, local stamp distributors would be hired at a handsome salary of 8 percent of the revenue collected.

English tradition held that taxes were a gift of the people to their monarch, granted by the people’s representatives. This view of taxes as a freely given gift preserved an essential concept of English political theory: the idea that citizens have the liberty to enjoy and use their property without fear of confiscation. The king could not demand taxes; only the House of Commons could grant it. Grenville agreed with the notion of taxation by consent, but he argued that the colonists were already “virtually” represented in Parliament. The House of Commons, he insisted, represented all British subjects, wherever they were.

Colonial leaders emphatically rejected this view, arguing that virtual representation could not withstand the stretch across the Atlantic. Colonists willingly paid local and provincial taxes, levied by their town, county, or colonial assemblies, to fund government administrative expenses and shared necessities like local roads, schools, and poor relief. In contrast, the stamp tax was a clear departure as a fee-per-document tax, levied by a distant Parliament on unwilling colonies.