Something to Fight About!
Ernie Neve, CPA
October 3, 2018
Fall is officially here, and that means whiskey season is back. Most drinkers probably don't think much about taxes when they visit their favorite bar or spirits shop. Liquor levies are generally based on volume, not price, so you pay the same amount of tax on a $4 fifth of Olde Ocelot as the swells pay for their $269 Pappy Van Winkle. But did you know that whiskey played a central role in our country's first tax protest, which took place around this same season 224 years ago?
Turn the dial on the Wayback Machine to 1791. The fledgling U.S. government was struggling to pay off $79 million in Revolutionary War debt. (Today that wouldn't cover a single F-35, let alone win independence from the greatest empire on earth.) Congress had already hiked tariffs as high as Treasury Secretary Alexander Hamilton felt they could go, so they were forced to tax domestic products. Americans loved liquor, in part because alcoholic drinks didn't spread disease (and also because it dulled the pain). So, naturally, Congress slapped a tax on it.
In western Pennsylvania, many farmers distilled their surplus grain into whiskey. Some even used it in lieu of currency. So naturally, none of them exactly raised a toast to the new tax. Out there on the edge of civilization, it sounded a lot like "taxation without representation," and we all know what happened the last time that was a rallying cry. Resistance began immediately, with area gangs tarring and feathering local tax collectors. By 1794, organized militias were battling federal marshals delivering subpoenas and warrants to distillers not paying the tax.
On September 25, 1794, President Washington federalized 12,950 troops (including future explorer Meriwether Lewis) to put down the rebellion. Then he rode out from the capital to lead the troops himself. Apparently his desk job running the country wasn't exciting enough! Fun fact: it was the only time a sitting U.S. president led forces in the field until President Thomas Whitmore (played by Bill Pullman) led a force of plucky jet fighters in a desperate sortie against alien invaders in the 1996 popcorn epic, Independence Day. (Don't bother with the 2016 sequel.)
Washington and his 12,950 troops proved to be maybe 12,900 more than the rebels could handle, and they fled before firing a single shot. Two of their leaders were convicted of treason and sentenced to hang, but Washington pardoned them. (No word on whether they made "dark-money" contributions to the President's PAC.) Opponents kept fighting the tax at the ballot box, helping Thomas Jefferson defeat John Adams in 1800 and repealing the tax. Still, historians agree that Washington's success in quelling the rebellion helped establish the legitimacy of the new federal government.
Today, of course, leading troops is an entirely different matter. If the president wants to target, say, terrorists in Yemen, he gives the word to the Joint Chiefs, who pass word down the ranks to an Air Force officer manning a joystick connected to a drone halfway around the world. The whole thing is about as antiseptic as visiting the dentist, at least on our side of the drone. Can you even imagine Barack Obama or Donald Trump saddling up a mighty steed, raising a sword, and leading a colonnade of troops into battle? We'll wait while you finish laughing. (Now that we mention it, maybe Dubya would have enjoyed that?)
Today, of course, there's an easier way to pay less tax. You don't have to assemble a militia or challenge government forces. You just need a plan. So call us when you're ready to save, and raise a toast to progress!