Making Economic Sense
Making
Economic Sense
by Murray Rothbard
(Contents
by Publication Date)
Chapter 44
The Whiskey Rebellion: a Model For Our Time?
In recent years, Americans have been subjected to a
concerted assault upon their national
symbols, holidays, and anniversaries. Washington's Birthday has been
forgotten, and Christopher
Columbus has been denigrated as an evil Euro-White male, while new and
obscure anniversary
celebrations have been foisted upon us. New heroes have been
manufactured to represent
"oppressed groups" and paraded before us for our titillation.
There is nothing wrong, however, with the process
of uncovering important and buried
facts about our past. In particular, there is one widespread group of
the oppressed that are still
and increasingly denigrated and scorned: the hapless American taxpayer.
This year is the bicentenary of an important
American event: the rising up of American
taxpayers to refuse payment of a hated tax: in this case, an excise tax
on whiskey. The Whiskey
Rebellion has long been known to historians, but recent studies have
shown that its true nature
and importance have been distorted by friend and foe alike.
The Official View of the Whiskey Rebellion is that
four counties of western Pennsylvania
refused to pay an excise tax on whiskey that had been levied by
proposal of the Secretary of
Treasury Alexander Hamilton in the Spring of 1791, as part of his
excise tax proposal for federal
assumption of the public debts of the several states.
Western Pennsylvanians failed to pay the tax, this
view says, until protests,
demonstrations, and some roughing up of tax collectors in western
Pennsylvania caused
President Washington to call up a 13,000-man army in the summer and
fall of 1794 to suppress
the insurrection. A localized but dramatic challenge to federal
tax-levying authority had been met
and defeated. The forces of federal law and order were safe.
This Official View turns out to be dead wrong. In
the first place, we must realize the
depth of hatred of Americans for what was called "internal taxation"
(in contrast to an "external
tax" such as a
tariff). Internal taxes meant that the hated tax man would be in your
face
and on your property, searching, examining your records and your life,
and looting and
destroying.
The most hated tax imposed by the British had been
the Stamp Tax of 1765, on all
internal documents and transactions; if the British had kept this
detested tax, the American
Revolution would have occurred a decade earlier, and enjoyed far
greater support than it
eventually received.
Americans, furthermore, had inherited hatred of the
excise tax from the British
opposition; for two centuries, excise taxes in Britain, in particular
the hated tax on cider, had
provoked riots and demonstrations upholding the slogan, "liberty,
property, and no excise!" To
the average American, the federal government's assumption of the power
to impose excise taxes
did not look very different from the levies of the British crown.
The main distortion of the Official View of the
Whiskey Rebellion was its alleged
confinement to four counties of western Pennsylvania. From recent
research, we now know that
no one paid the tax on whiskey throughout
the American "back-country": that is, the frontier
areas of Maryland, Virginia, North and South Carolina, Georgia, and the
entire state of Kentucky.
President Washington and Secretary Hamilton chose
to make a fuss about Western
Pennsylvania precisely because in that region there was a cadre of
wealthy officials who were
willing to collect taxes. Such a cadre did not even exist in the other
areas of the American
frontier; there was no fuss or violence against tax collectors in
Kentucky and the rest of the
back-country because there was no one willing to be a tax collector.
The whiskey tax was particularly hated in the
back-country because whisky production
and distilling were widespread; whiskey was not only a home product for
most farmers, it was
often used as a money, as a medium of exchange for transactions.
Furthermore, in keeping with
Hamilton's program, the tax bore more heavily on the smaller
distilleries. As a result, many large
distilleries supported the tax as a means of crippling their smaller
and more numerous
competitors.
Western Pennsylvania, then, was only the tip of the
iceberg. The point is that, in all the
other back-country areas, the whiskey tax was
never paid. Opposition to the federal
excise tax program was one of the causes of the emerging
Democrat-Republican Party, and of the
Jeffersonian "Revolution" of 1800. Indeed, one of the accomplishments
of the first Jefferson
term as president was to repeal the entire Federalist excise tax
program. In Kentucky, whiskey
tax delinquents only paid up when it was clear that the tax itself was
going to be repealed.
Rather than the whiskey tax rebellion being
localized and swiftly put down, the true story
turns out to be very different. The entire American back-country was
gripped by a non-violent,
civil disobedient refusal to pay the hated tax on whiskey. No local
juries could be found to
convict tax delinquents. The Whiskey Rebellion was actually widespread
and successful, for it
eventually forced the federal government to repeal the excise tax.
Except during the War of 1812, the federal
government never again dared to impose an
internal excise tax, until the North transformed the American
Constitution by centralizing the
nation during the War Between the States. One of the evil fruits of
this war was the permanent
federal "sin" tax on liquor and tobacco, to say nothing of the federal
income tax, an abomination
and a tyranny even more oppressive than an excise.
Why didn't previous historians know about this
widespread non-violent rebellion?
Because both sides engaged in an "open conspiracy" to cover up the
facts. Obviously, the rebels
didn't want to call a lot of attention to their being in a state of
illegality.
Washington, Hamilton, and the Cabinet covered up
the extent of the revolution because
they didn't want to advertise the extent of their failure. They knew
very well that if they tried to
enforce, or send an army into, the rest of the back-country, they would
have failed. Kentucky and
perhaps the other areas would have seceded from the Union then and
there. Both contemporary
sides were happy to cover up the truth, and historians fell for the
deception.
The Whiskey Rebellion, then, considered properly,
was a victory for liberty and property
rather than for federal taxation. Perhaps this lesson will inspire a
later generation of American
taxpayers who are so harried and downtrodden as to make the whiskey or
stamp taxes of old
seem like Paradise.
Note: Those interested in the Whiskey Rebellion
should consult Thomas P. Slaughter,
The Whiskey Rebellion (New York: Oxford
University Press, 1986); and Steven R. Boyd, ed.,
The Whiskey Rebellion (Westport, CT:
Greenwood Press, 1985). Professor Slaughter notes that
some of the opponents of the Hamilton excise in Congress charged that
the tax would "let loose a
swarm of harpies who, under the denominations of revenue offices, will
range through the
country, prying into every man's house and affairs, and like Macedonia
phalanx bear down all
before them." Soon, the opposition predicted, "the time will come when
a shirt will not be
washed without an excise."
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