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In order to save face, Parliament repealed the Stamp Tax in 1766.
In order that the colonists would not be tempted to think that Parliament did this because they were forced to by colonial violence, the Parliament immediately passed the "Declaratory Act," which basically said this:
"Yes, we repealed the Stamp Tax, but don't think that you made us do it. We could have kept it in place if we wanted to. But we took it back because we wanted to be nice."
In retrospect, this was a fatal decision. It gave the rebels in America the impression that they could nullify anything Parliament did with a little violence, boycotts, and disobedience. From this point on, Parliament could not make a decision about America without instigating a protest.
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