Whiskey Rebellion were the government's primary source of revenue, had been raised as high as feasible. He therefore promoted passage of an excise tax on domestically produced distilled spirits. This was to be the first tax levied by the national government on a domestic product. Whiskey was by far the most popular distilled beverage in late 18th-century America, so the excise became known as the "whiskey tax." Taxes were politically unpopular, and Hamilton believed that the whiskey excise was a luxury tax and would be the least objectionable tax that the government could levy. In this, he had the support of some
Whiskey Rebellion Farmers living west of the Appalachian Mountains distilled their excess grain into whiskey, which was easier and more profitable to transport over the mountains than the more cumbersome grain. A whiskey tax would make western farmers less competitive with eastern grain producers. Additionally, cash was always in short supply on the frontier, so whiskey often served as a medium of exchange. For poorer people who were paid in whiskey, the excise was essentially an income tax that wealthier easterners did not pay. Small-scale farmers also protested that Hamilton's excise effectively gave unfair tax breaks to large distillers, most of whom