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Give Me Liberty or Give Me Whiskey!
Taxes. One of the founding principles of our country, or actually the reluctance to pay them that was the founding principle. Needless to say, we’ve had a bad relationship with taxation ever since.
Nobody likes to pay taxes, but we can all agree there are some things we can do better as a community than we can do by ourselves. Building roads, public utilities, law enforcement, fire department, the list goes on and on. But, defense, is a big check mark on the list. As a nation, one third of our federal budget is devoted to the military.
But, how do you finance a war effort if you can’t levy taxes? During the Revolutionary War the young United States had that very problem. They literally begged, borrowed, and stole whatever money they could from various sources by any means possible, including piracy (they called it “privateering”). They also obtained high interest loans from the other countries, including France and Spain, they cut deals with investors from the Netherlands, and borrowed hard currency from all 13 colonies. Interesting times they were; fighting a war for independence on borrowed money and borrowed time, being crushed by interest payments- thoughts of paying down the principle were far off in the future. They were in a spiral, from the beginning of the rebellion in 1775 until the Treaty of Paris in 1783, the only real choice that the Continental Congress had was to continually borrow more money to cover the interest on the loans that were already in arrears. By the end of the war the world’s newest republic was broke. The Continental Dollar was worthless, they owed money to investors and the states, and had nothing to pay the soldiers and sailors of the Continental Army or the US Navy, many of which had not been compensated from the beginning of their service. Their first order of business was getting the government in order, and to do that they had to figure out a way to implement and levy taxes and raise some coin… But what were they going to tax?
One of the things they decided on was whiskey. And that decision almost caused a civil war seventy years before the big one.
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By Allen Tatman
5
2929 ratings
Taxes. One of the founding principles of our country, or actually the reluctance to pay them that was the founding principle. Needless to say, we’ve had a bad relationship with taxation ever since.
Nobody likes to pay taxes, but we can all agree there are some things we can do better as a community than we can do by ourselves. Building roads, public utilities, law enforcement, fire department, the list goes on and on. But, defense, is a big check mark on the list. As a nation, one third of our federal budget is devoted to the military.
But, how do you finance a war effort if you can’t levy taxes? During the Revolutionary War the young United States had that very problem. They literally begged, borrowed, and stole whatever money they could from various sources by any means possible, including piracy (they called it “privateering”). They also obtained high interest loans from the other countries, including France and Spain, they cut deals with investors from the Netherlands, and borrowed hard currency from all 13 colonies. Interesting times they were; fighting a war for independence on borrowed money and borrowed time, being crushed by interest payments- thoughts of paying down the principle were far off in the future. They were in a spiral, from the beginning of the rebellion in 1775 until the Treaty of Paris in 1783, the only real choice that the Continental Congress had was to continually borrow more money to cover the interest on the loans that were already in arrears. By the end of the war the world’s newest republic was broke. The Continental Dollar was worthless, they owed money to investors and the states, and had nothing to pay the soldiers and sailors of the Continental Army or the US Navy, many of which had not been compensated from the beginning of their service. Their first order of business was getting the government in order, and to do that they had to figure out a way to implement and levy taxes and raise some coin… But what were they going to tax?
One of the things they decided on was whiskey. And that decision almost caused a civil war seventy years before the big one.