Sales Tax

7 cents

In 1790, the new United States government was trying to establish itself. Because the Revolution had caused the U.S. to sink into a great debt, during the 1791 winter session of Congress, both houses approved a bill that put an excise tax on whiskey. Alexander Hamilton, the US Secretary of Treasury, came up with the bill to prevent the national debt from growing. However, protests soon arose from all districts, especially in the western counties of Pennsylvania.

This is because acceptance of the excise tax varied with the production of different counties. Large producers, who made whiskey as a business venture, were more likely to accept the tax, because they could make a yearly tax payment of six cents per gallon. However, smaller producers, who only made whiskey on occasion, now had to make nine-cents-per-gallon payments throughout the entire year. Though large producers could lower the cost of the tax if they produced even larger quantities, smaller producers were penalized.

These smaller producers were usually in the western counties, and these westerners absolutely hated the tax. Frontier farmers disliked it because they were forced to pay up front in cash, something culturally unheard of on the western frontier. In addition, because of the great effort needed to transport products over the mountains to Eastern markets, farmers thought it would be more cost efficient to transport the whiskey of their grain rather than the grain itself.

Every state south of New York had western counties that protested the new excise tax with violence. Not only were people upset about paying the tax, but the westerners also felt that the revenues from the tax would support a national government that didn't care about western interests. As a result, most refused to pay it, and excise officers were run out of counties by threats, tarring, feathering, torture, and other methods of humiliation.

As a result of this unrest, the WHISKEY REBELLION of 1794 occured throughout the western frontier, with western Pennsylvania residents playing the biggest role. The violent reaction led President George Washington to send 12,950 miltia men to suppress the rebels. Not only did western PA threaten tax collectors, they actually carried out their threats, with a furious crowd mobbing collector John Neville's house in Washington County. The mob shot both Neville and his slaves and proceeded to burn down his house.

To placate the rebels, Congress decided to hear the demands of the west. Each county was asked to choose between 3-5 representatives and bring their demands to the assembly. Hugh Henry Brackenridge and Albert Gallatin were he main moderators of these meetings and prevented the rebels from taking over during heated arguments. The Whiskey Rebellion is significant because it represented an assault against the federal government.