Econ paper

Americans have always had a strong disapproval of taxes, especially when they are the ones getting taxed. This was precisely the case during the Whiskey Rebellion occurring from 1791-1794. Farmers outraged by a new excise tax on whiskey protested and refused to pay. However the goal of the taxes was to help pay off a $54,000,000 national debt acquired during the Revolutionary War (Historical Spotlight). “Whiskey was a popular drink at the time, so such a tax could raise a lot of revenue”(Paul Krugamn and Robin Wells). American citizens benefited from the Revolutionary War, so shouldn’t they have to pay for it? I strongly believe they should due to the benefits principle of economics. According to the benefits principle those who benefit from the spending should have to pay the tax. Since whiskey was so popular and almost everyone on America used it, it was the perfect item to tax. With nearly everyone consuming or producing whiskey the whiskey tax produced maximum government revenue while simultaneously spreading out the burden of the tax.
But who did the tax really fall on? The producers or consumers? Since whiskey is highly elastic, meaning it has many substitutes, the majority of the tax fell on the producers. Consumers were still affected by this tax, but not nearly to the extent that the producers were. To make matters worse the tax favored larger whiskey distillers. Producers either had the choice to pay a flat rate or by the gallon. Small producers did not make enough money to pay the flat rate so ended up paying by the gallon. On average small producers paid a tax of nine cents per gallon while large producers only paid six cents per gallon(Historical Spotlight).
Finally in 1794 George Washington, accompanied by 13,000 soldiers, matched down to Pennsylvania and put an end to the rebellion. We learned many things from the Whiskey Tax and the Whiskey Rebellion. We learned that it is impossible to satisfy everyone (especially when it comes to taxes). We