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The Whys of Taxes

Theme 2: Taxes in U.S. HistoryLesson 2: Early Tax Issues


Illustrations of a factory representing industry, a cotton plant representing cotton farmers, and a pitchfork representing uprising farmers.
After the Revolutionary War and the War of 1812, the United States was faced with a tremendous war debt and a need to create economic stability and prosperity. Two taxes--the Whiskey Tax of 1791 and the Tariff of 1832--were especially important in shaping the development of the young nation.

The Whiskey Tax

In 1791, Congress placed an excise tax on the sale of whiskey. The tax was intended to help shift resources from individuals to national programs, such as building roads and post offices, and supporting a western defense.

Farmers in western Pennsylvania believed that their livelihoods were threatened by the tax, and many refused to pay it. In 1794, they took part in the Whiskey Rebellion to protest the tax. President Washington sent militias into western Pennsylvania, and the rebellion was defeated.

The Whiskey Rebellion was the first test of the government's constitutional power to tax. Some criticized Washington for sending troops to face American citizens, yet his actions enforced the federal government's authority. Washington made the point that the Constitution is the law of the land and must be obeyed.

The Tariff of 1832

Nearly 40 years after the Whiskey Rebellion, one region of the country again felt threatened by a tax--a revenue tariff. The Tariff of 1832 was a protective tariff that significantly taxed imported goods.

infant industries such as the factories in the North benefited from this tariff because people bought more domestic goods. Southern cotton farmers, however, lost business because the English textile industry could not buy as much cotton from the South. South Carolina called for a nullification, or rejection, of the federal tariff and threatened to leave the union. President Andrew Jackson stepped in, and a compromise was reached in 1833.


quick check
What were two effects of the Tariff of 1832 on southern cotton farmers?

tax trivia
Did You Know?
In 1774, Britain passed a series of harsh laws designed to punish colonists who rebelled during the Boston Tea Party. American colonists called them "the Intolerable Acts."

Test your tax trivia knowledge by answering the following multiple-choice question. Click on the correct answer. To assess your answer, click the Check My Answers button.
Given what you know about southerners' feelings about the tariffs set between 1816 and 1832, which of the following was the name they gave to the tariff of 1828?
  • A.
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  • D.

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