A Taxing History

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With debts owed on the US revolution, in 1791 Treasury Secretary Hamilton proposed an excise tax on whiskey. This first American tax was 6 cents per gallon for large producers, 9 cents for small operators. The large manufacturers accepted it, but this put many small producers at risk of bankruptcy. In 1794, a group of these farmer distillers in western Pennsylvania started the Whiskey Rebellion. After negotiations failed, the rebellion was eventually put down by a show of George Washington's federal forces. The two people convicted of treason on the matter were later pardoned by Washington. In 1801, once the immediate debts were paid, the tax was repealed. Following is a chart of beverage taxes over history ending with the current rate of $13.50 per gallon. Note this is Federal only - the states get their share too!