The “revolution which has given us the Constitution,” said a letter to the editor in 1790, was the default on the public war debts and “the very great embarrassments which attended all concerns on that account.” The constitutional revolution is in this sense like the French Revolution. In 1792, a delegate to the French National Assembly announced that “we only made the Revolution to become masters of taxation.” The French monarchy of the ancien regime had used a tax system so riddled with exemptions, privileges, and libertés, and saddled with such a thicket of middle men, that it could not reach the wealth of a prosperous country to solve the financial bankruptcy of the monarchy. Like the French Revolution, one aim of our constitutional revolution was to allow the national government to gain access to the wealth of the nation, that is, to master taxation.

The fiscal crisis that caused the constitutional revolution was solved, however, with quite modest federal taxes. In 1790, Alexander Hamilton, the newly installed Secretary of the Treasury, recommended to Congress a financial package that followed the 5 percent impost proposals of 1781 and 1783. The major difference between the 1790 and the 1781 and 1783 proposals was that the new Constitution allowed Congress to adopt the impost, and then a supplemental whiskey tax, without facing the one-state veto rule of the Articles and, indeed, without approval from any state. The revenues from the modest federal taxes were pledged to the payment of the war debts.