Editing Whiskey Rebellion (section)

== Whiskey tax ==
[[File:Alexander Hamilton A17950.jpg|thumb|[[Alexander Hamilton]] in a 1792 portrait by [[John Trumbull]]]]

A new U.S. federal government began operating in 1789, following the ratification of the United States Constitution. The previous central government under the [[Articles of Confederation]] had been unable to levy taxes; it had borrowed money to meet expenses and fund the Revolutionary War, accumulating $54 million in debt. The state governments had amassed an additional $25 million in debt.{{sfn |Chernow |2004 |p=297}} Secretary of the Treasury [[Alexander Hamilton]] sought to use this debt to create a financial system that would promote American prosperity and national unity. In his ''[[Report on Public Credit]]'', he urged Congress to consolidate the state and national debts into a single debt that would be funded by the federal government. Congress approved these measures in June and July 1790.{{sfn |Chernow |2004 |pp=327–30}}

A source of government revenue was needed to pay the respectable amount due to the previous bondholders to whom the debt was owed. By December 1790, Hamilton believed that import duties, which were the government's primary source of revenue, had been raised as high as feasible.{{sfn |Chernow |2004 |p=341}} He therefore promoted passage of an excise tax on domestically produced distilled spirits. This was to be the first tax levied by the national government on a domestic product.{{sfn |Hogeland |2006 |p=27}} The transportation costs per gallon were higher for farmers removed from eastern urban centers, so the per-gallon profit was reduced disproportionately by the per-gallon tax on distillation of domestic alcohol such as whiskey. The tax applied to all distilled spirits, but consumption of [[American whiskey]] was rapidly expanding in the late 18th century, so the excise became widely known as a "whiskey tax".<ref name="Risen 2013">{{cite web | last=Risen | first=Clay | title=How America Learned to Love Whiskey | website=The Atlantic | date=December 6, 2013 | url=https://www.theatlantic.com/national/archive/2013/12/how-america-learned-to-love-whiskey/282110/ | access-date=April 24, 2020}}</ref> Taxes were politically unpopular, and Hamilton believed that the whiskey excise was a luxury tax and would be the least objectionable tax that the government could levy.<ref>{{harvnb |Chernow |2004 |pp=342–43}}; {{harvnb |Hogeland |2006 |p=63}}</ref> In this, he had the support of some social reformers, who hoped that a "[[sin tax]]" would raise public awareness about the harmful effects of alcohol.{{sfn |Slaughter |1986 |p=100}} The [[Tariff of 1791|whiskey excise act]], sometimes known as the "Whiskey Act", became law in March 1791.<ref>{{harvnb |Slaughter |1986 |p=105}}; {{harvnb |Hogeland |2006 |p=64}}</ref><ref>[[s:United States Statutes at Large/Volume 1/1st Congress/3rd Session/Chapter 15|ch. 15]], {{USStat|1|199}}</ref> George Washington defined the revenue districts, appointed the revenue supervisors and inspectors, and set their pay in November 1791.<ref>American State Papers [Finance: Volume 1], 110</ref>