How We Got Here: The Debate II
To continue... The Whiskey Rebellion more or less blew up in Alexander Hamilton’s face. The tax he pushed through congress on whiskey that triggered the entire affair was shortly thereafter repealed and it was a while before the federal government tried to impose internal taxes. One of the stated goals of the revolution was to end taxation without representation, but in practical terms this meant an end to taxation, period. The federal government used tariffs and land sales to pay off the debt incurred by the revolutionary war. Jefferson’s purchase of Louisiana was still done by a combination of the two plus borrowing. Generally, tariffs were kept low, to encourage volume of trade. Some high tariffs were employed in the 1820s and 1830s as protectionist measures to level the field with Britain, which was in the midst of its “workshop of the world” period. The South hated these tariffs because it raised the price of manufactures and shipping, which impacted on their trade which was almost entirely agricultural. It was different in the states. Property taxes early became a source of state revenue. The definition of “property” for the purposes of such taxes stretched far beyond the bounds we would recognize or accept today and under Jackson came to include just about anything a person owned. Local reaction to such impositions varied by city and state, but rarely rose to the level of rebellion. Federal internal taxes did not come into play until the Civil War. The need to raise revenue in huge amounts and quickly necessitated the creation of the first income tax, among others, including a vast array of excise taxes and licensing. There were special corporate taxes, stamp taxes for legal documents, and inheritance taxes. Most of these were phased out after the Civil War. Interestingly, the Republicans—a new party formed just before the Civil War which became the second national party, supplanting the archaic Whigs—kept two elements of the new tax system: high tariffs and taxes on liquor and tobacco. High tariffs were protectionist measures. The excises on liquor and tobacco were not greatly challenged because they coincided with the growing Temperance Movement, which was becoming politically significant. [More . . . ]