Can you imagine an America without any federal taxes?  Well that is exactly what we had in our first two years as a nation.  Zero federal taxes.  Each state was allowed to tax what their individual legislatures deemed appropriate.  However, Alexander Hamilton and America’s first congress had different ideas.

Hamilton had proposed a tax on distilled spirits to raise revenue to pay down the national debt. It had soared after the federal government assumed debts incurred by states in the Revolutionary War as part of the grand bargain that led to the adoption of the U.S. Constitution.

After a vigorous debate, the House decided by a vote of 35-21 to approve legislation imposing a seven cent per-gallon excise tax on whiskey.  The measure was intended to pay off debts incurred by the Revolutionary War.  This marks the first time in our history that congress voted to tax an American product.

Hamilton said the tax would serve “more as a measure of social discipline than as a source of revenue.” But, perhaps most important, he wanted the tax to advance and secure the power of the weak federal government.

Southern and western farmers, whose grain crop was a chief ingredient in whiskey, loudly protested the tax. These farmers earned much of their income by distilling their spare grain into liquor, and they were incensed that the tax was aimed at producers, not consumers.

According to politico:

“In 1794, farmers in western Pennsylvania attacked federal officials seeking to collect tax on the grain they had distilled into whiskey. One group of resisters, disguised as women, assaulted a tax collector, cropped his hair, tarred and feathered him and stole his horse.”

What Was The First Federal Tax on an American Made Product?

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And thus began an incredibly important event in the American experiment – The Whiskey Rebellion.

The rebellion escalated when a mob of farmers in Washington County, Pennsylvania burned down the mansion of the Inspector of Revenue in southwestern Pennsylvania, Brig. Gen. John Neville.  The General was close friends with President George Washington. describes the unprecedented events that followed:

“On August 7 President Washington, recognizing that he must maintain control if the fledgling government was to survive, issued the Whiskey Rebellion Proclamation ordering the insurgents to go home and calling out a militia force of several thousand from four states. After efforts of negotiators to try and calm the insurrection failed, President George Washington, acting upon the advice of Federalist Alexander Hamilton, decided to make an example of the rebels and rode to Western Pennsylvania with 13,000 militia troops to quash the rebellion.

Washington accompanied the troops as far as Bedford, where he spent the night at the house of David Espy on October 18. The next day, he reviewed the assembled troops, issued orders to General Lee, and then started back to Philadelphia. This was to be the last time George Washington personally led troops on the field, and the only time he did so as President.

What Was The First Federal Tax on an American Made Product?

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By the time the federal force arrived in Western Pennsylvania, the rebellion had collapsed and most of the rebels had fled. The Whiskey Rebellion officially ended on the night of 13 November, 1794, with the arrest of approximately 150 remaining rebels. It was not until 1801 that the excise tax on whiskey was officially ended, however.”

All those arrested were eventually granted a presidential pardon by General Washington.  Cheers.

What Was The First Federal Tax on an American Made Product?

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