“Our new Constitution is now established, and has an appearance that promises permanency; but in this world nothing can be said to be certain, except death and taxes.”
—Benjamin Franklin, 1789
With all the uncertainty that seems to have befallen the country lately, it seems a good time to chat about those couple of things in life that we can all count on. Not in the mood to write about death, I’ve decided to write about taxes.
Taxes are at the heart of the American story, right along with George Washington. As a general, he rallied his troops against the British Empire’s right to tax its North American subjects. As president, however, he had bills to pay. This is the downside of winning a revolution.
You see, even though the American people were all giddy about becoming independent, it turns out that standing up for what you believe in can be really expensive. Before the ink was dry on the U.S. Constitution in 1789, the nation faced an existential crisis related to the very issue that had given rise to colonial rebellion in the first place: raising money. Indeed, many of the taxes imposed upon the colonists by the British parliament before the revolution were meant to offset the cost of kicking the French out of North America in the 1760s. (I bet you didn’t know that kicking non-English-speaking people out of the country is almost as American as apple pie and Chevrolets.)
Anyway, the Constitution was adopted in large part to stabilize the American economy. Saddled with tens of millions of dollars in war debt, the country’s money problems were first overseen by Washington’s Secretary of the Treasury and, no matter how much you have fallen for Alexander Hamilton lately, you should know that it was his idea to pay off the country’s VISA bill with its MasterCard. Of course, plastic hadn’t been invented yet, but you get the idea.
Tens of millions of dollars doesn’t sound like much today, but you’ll just have to take my word for it that it was a lot. As for today’s twenty trillion-dollar national debt, I’d like to blame the ten-dollar founding father without a father but we have had over two hundred years to work on that one. No one knows what a trillion is anyway; except that it has a lot of zeroes.
In 1790, government revenue was dependent upon the taxation of imported goods. (FYI, it didn’t work then, either.) Despite Hamilton’s ability to juggle the nation’s bills, the government needed another source of income. The trick was to discover those who might be persuaded to pay taxes without making too much of a fuss about it; sort of like today’s middle class.
Here’s the part about the moonshine. Even though there is no culinary pleasure equal to that of sinking one’s teeth into an ear of salty hot-buttered corn, farmers in western Pennsylvania of 1790 had discovered that distilling that corn into whiskey was much more lucrative. One of the problems of living on the frontier, however, is the dearth of customers. Those who hoped to sell their surplus moonshine had to haul it up and over the Appalachian Mountains. In a country that was essentially broke, you can imagine what the roads were like and, with limited space in the wagon, hauling barrels of booze just made more sense than hauling barrels of corn.
The newly elected lawmakers in Philadelphia saw their opportunity and seized it. In the first domestic tax ever levied under the powers granted by the Constitution, Congress passed a bill that taxed intoxicating spirits and the president signed it into law in 1791. Assuming that any grumbling corn farmers/distillers on the frontier would not be in a position to complain, the law burdened them much more than the larger distillers in the east. In the end, taxes were levied more heavily upon individual farmers carving out a living from the land than the corporate distillers, who were closer to the seat of power.
Does any of this sound familiar?
Unfortunately, Washington, Hamilton, and the Congress seem to have forgotten that many of these farmers had just fought a revolution over unjust taxation. They were tough, too, if living on the frontier is any measure of that… and I think it is. With a rekindled revolutionary spirit, an independent streak born of revolution and the West, and no desire to pay taxes to a distant and arbitrary source of power, these frontier farmers stormed courthouses, tarred-and-feathered tax collectors, and essentially engaged in armed insurrection against the new government of the United States. The very survival of the Constitutional system was at stake less than two years into the grand American experiment.
It is no small irony that President George now had to deal with the same problem previously faced by King George III. To wit, what does a George do when the people refuse to pay their taxes? Let’s check the Constitution. Even though the document says nothing about taxing moonshine, it says a great deal about how to deal with threats. So, as commander-in-chief, President Washington dusted off his old uniform, saddled a trusty steed, and led an army of 13,000 militiamen—offered by the various states—into the backcountry. In the face of such a superior demonstration of force, the Whiskey Rebels scattered. To this day, President Washington is the only sitting president to personally lead men into battle. Now, that’s how you get your face on the money.
There is, of course, more to the story. Most relevant is that the whiskey tax, the rebellion, and the subsequent reaction of the federal government, led to a polarizing debate over the right to tax, began to define the relationship between the federal government and the states, solidified the authority granted to the commander-in-chief, and most significantly, birthed the two-party system.
I’ll drink to that… I’ll drink to that… I’ll drink to that.