Why was the British crown unable to generate direct net revenue from its West Indian possessions during the early modern era, while a country such as Denmark was able to do just that? is paper undertakes a comparison between Great Britain and Denmark, which might yield important insights into what yielded revenue and drove the costs of colonialism. The British West Indian lobby, this paper proposes, was comparatively successful in shifting the burden of taxation to other areas, for example import tariffs, thus keeping direct taxation on colonial subjects low. In the Danish West Indies, direct taxation was on the other hand comparatively high. Danish neutrality during the period also contributed to reducing military costs for the state. The findings emphasize the importance of political power for the profitability of colonialism.