MYTHBUSTERS
CHRIS MIDDLETON
Issue 167 | Whisky Magazine 15
RIVERS OF GOLD AND BLOOD
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I
n Britain, the development of
commercial breweries in the
17th century took ale production
out of the home, making it easier for
Government to monitor and collect
tax at consolidated brewing locations.
On the heels of breweries, distilleries
became an even more valuable revenue
Ǥ
β
alcohol tax on the domestic production
of ale was in England during May 1643,
spirits followed in 1663 with a tax
on aqua vitae, gin and compounded
English brandy made from malt spirit.
Taxes on spirits were the largest
revenue source for English-speaking
Governments until the 20th century.
The manufacture of high-proof spirits at
large scale premises made the reporting
or gauging through every step from
production, bond store withdrawals
to retail sales accountable to the
half-gallon. Even today, spirits pay
disproportionately higher tax rates than
beer, wine or cider in most countries.
Two hundred years after distilling
entered Europe, Frankfurt-on-Maine
β
in 1360 to control unruly drunkenness
induced by the local schnapsteufel,
βǤͳͶͻʹ
β
shipments of brandwijn from France
and Germany. The word excise comes
from the Dutch excijs to tax. The English
β
tax on local ‘aqua vitae and strong
waters’ from December 1663 to fund
military expenditure and to pay down
the accruing debt left from the English
Civil War (1643 – 1651). Preceding the
liquor excise, the Government began
taxing malted barley, the raw material
for making ale and malt spirits from
ͳͶͶǤ
duplicated the English 4d per gallon
duty on aqua vitae in January 1664.
Once Governments discovered
this lucrative revenue stream, they
regularly tapped into it by increasing
rates of excise and customs duties
and added fees for distillery licences
from 1688. These rivers of gold helped
underwrite nearly 200 years of wars.
Between wars, to feed the ambitions of
empire and improve living standards,
Parliaments continued to tax liquor.
They also enacted extra duties on the
raw materials targeting malted grains,
molasses imports and corn taxes
further enriching the Exchequer’s
Ǥ
won their War of Independence
ǡβ
ͳͻͳǡ
brandy to pay down the mounting
$52.8 million debt to France and
Ǥǡ
abolished spirit duties until the War
of 1812 against Britain when duties
recommenced from December 1814.
The War won, taxes were removed
in December 1817 until the Civil
War forced Congress to legislate the
ͳ ͅʹǤ
ͳ ͅ͵Ǥ
ǡ
ǡ
β
addicted to spirit taxes.
The Western world’s focus in
ͳͻ
national defence into a euphemistic
war against intemperance by
prosecuting social policies to limit
access and consumption of alcohol,
leading to countries introducing
draconian prohibitions and limits on
the manufacture and sale of liquor.
The enemy was public consumption.
Ironically, it was the massive costs
of the First World War that relieved
the public’s tax burden on liquor as
Western Governments legislated a new
suite of taxable domains. Governments
introduced personal income and new
company taxes, plus a raft of protective
tariffs, levies, duties and ad valorem
β
Ǥ
taxes reduced the ‘stimulant’s or ‘sin
taxes’ (liquor and tobacco) share of the
Ͳ
ͳͻ
century, to around 25 per cent before
the First World War, to now where
it’s less than half a per cent of most
Ǥ
tariffs are still small monetary levers
that Governments use to raise small
quanta of revenue, engineer social
programs and now punish foreign
Governments in trade disputes. In
the 21st-century whisky tariffs are
Ǯǯβ
trade wars in Europe and China.
After the Civil War,
the US Government
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