The excise tax

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The excise tax

Unread postby bourbonv » Sat Apr 23, 2005 10:49 am

Looking at many 19th century articles on the bonding period and the excise tax, I realise just how much a 21st century outlook effects our view of the taxes. The tax that was put on spirits during the Civil War had quite a bit of support and not from where you would think that support would come from - it was supported by the distillers. Here are a few of the reasons for their support:

1) It was believed that the tax would serve to prevent over production of whiskey. The tax meant only those with capital to spare would be able to produce.
2) The tax would serve to create an equal market place with prices being controlled by the tax - everyone would have to sell at price to pay the tax.
3) It would help fight prohibition. Indeed the prohibitionist fought the hardest against increases in the excise tax. They knew the more the government came to depend on the money raised, the harder it would be for them to prohibit alcohol in the United States.
4) The tax would give the distillers more political power in Washington as the government became more dependent on the money raised. This would help them get such items as Bottled-in-Bond passed and a final decision by President Taft in the Pure Food dispute of what is whiskey.

Even though the modern bourbon drinker cringes everytime the politicians start talking about raising the "Sin Tax", it is helpfull to know that the taxes are not completely a bad thing. Many of these original reasons still apply today. Now if they would only go back to $1.00 a proof gallon tax rate, I think everybody would be happy.

Mike Veach
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