4. Why did excise taxes disproportionately affect smaller distilleries compared to larger distilleries?

A. Larger distilleries did not have to pay the excise tax if they produced enough whiskey.
B. Larger distilleries received money from the federal government to help them pay the cost of the taxes.
C. Smaller distilleries did not receive money.
D. The federal government levied a flat excise tax rate on distilled spirit production, but the Pennsylvania state government made smaller distilleries pay a higher tax rate.
E. Distilleries that produced a large amount of whiskey received a lower tax rate, so they could charge less for their goods.

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GinnyAnswer GinnyAnswer · Answer 1 · 2024-06-21T15:01:04-04:00

Smaller distilleries were more impacted by excise taxes due to exemptions for larger distilleries and lack of financial assistance.

Excise taxes disproportionately affected smaller distilleries compared to larger ones due to several reasons:

Larger distilleries could produce enough whiskey to be exempt from the tax, giving them an advantage.
Smaller distilleries did not receive financial assistance from the government, unlike larger ones.
The Pennsylvania state government imposed higher tax rates on smaller distilleries, further burdening them.

These factors led to smaller distilleries being more negatively impacted by excise taxes, affecting their competitiveness and profitability.

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