Who would deny a doctor visit to an uninsured kid with asthma? Who could?

At issue is S-CHIP, the State Children’s Health Insurance Program, founded in legislation passed in 1997. The original intent of the $40 million dollar block grant issued to states was to boost the insured rate among families who didn’t qualify for Medicaid. Earnings caps were raised to an average of 200% of poverty levels and applied through a combination of state and federal (S-CHIP) programs, according to the Urban Insititute.

The program has been funded through an excise tax on tobacco, including a cigarette rate of 15 cents per pack.

In 2007, Congress tried desperately and unsuccessfully to introduce a bill that would not be knocked down by one of W’s rare vetoes. Mr President was unconvinced that the costs were low enough. But the popular and by many accounts effective stop-gap was threatened with closure.

Enter the 2009 bill, which is expected to pass shortly. Having passed the House handily, the Senate has OK’d a version of the resolution. Upgrades include coverage for pregnant legal immigrants and legal immigrant children, forgoing a five-year waiting period. This costs around $35 billion.

Who pays? Smokers again. This time it’s 61 cents per pack.

All this raises the question: what is the wisdom in funding based on a series of sin taxes on a dwindling segment of the population? The number of smokers is declining, shrinking the revenue if trends continue. Such a regressive tax also tends to  harm a demographic that can’t afford the burden. Many who use cigarettes have lower incomes than the median.

And it’s clear that such tax hikes either drive people to smoke less or turn to alternative sources for their tobacco. The Internet or interstate options come to mind. Gradually, the transport of cigarettes from states with lower prices to the higher-priced states will rise. And new boot-legging will increase. Collected taxes will decrease.

Also at stake: what is the rationale for using such a seemingly punitive measure?  It’s hard to argue that this bill should not pass. With such a positive outcome from 1997-2007, S-CHIP should be renewed. However, the revenue source is suspect. Taxing toilet paper at 3 cents a pack seems more fair and spreads the cost more painlessly.

Ultimately, the concept behind sin taxes is the real debate. Unpopular as it may be, there is certainly some logic to generating insurance funding through items such as cigarettes and alcohol. People who consistently use either will cost more in health care over the courses of their lives. This could be addressed with higher insurance premiums, though.

The newest candidate for the tax is any food product that causes obesity, certainly a growing demographic. New York State recently began considering a soda tax of 18% as sugar is unequivocally associated with obesity. The Institute of Medicine reports that such taxes already exist in Virginia, Tennessee, and Washington. New York City has required nutritional fact sheets to be displayed at many restaurants and cafes. Obviously, this suggests that trends in public consciousness will make this an area of opportunity for taxation in the coming years.

As laws evolve enacting excise tax funding statutes, we should be sure to engage public discussion to insure that they are equitable and sustainable. Who knows, we may end up with another Whiskey Rebellion.

By the time the army arrived in Western Pennsylvania the hotheads who had protested taxation, not of tea, but whiskey, had gone home to their farms. Soldiers stumbled upon a few surprised workers and arrested seventy-five men, shipping them back east, where they were tried and acquitted of treason, except for two who were pardoned by George Washington, on the grounds that one was feeble-minded and the other insane.

The headaches started in 1791 when Alexander Hamilton pushed through congress a 25% excise tax on whiskey, to be levied at source, which in the case of the Pennsylvania farmers was a multitude of small stills in barns and outhouses dotted around the back country. Hamilton no doubt acted from a sense of fiscal responsibility, but three hundred miles across the mountains was a different world and the wealthy Easterner overlooked several important facts.

One was a belief on the part of the farmers that the tax was one more instance of rich Easterners bleeding hard-working poor frontiersmen. Whiskey was important to these people. They distilled the spirit from grain, since the long journey across the mountains to the major markets of the east was expensive, and whiskey was much easier to transport than the bulky primary product. Distance also meant that a tax at source would be difficult to pass on to the consumer across the mountains, and locally, whiskey was used in what was still largely a barter economy, almost as a form of currency. A familiar tipple, a linchpin of the economy, and a basic money maker, the spirit was dear to the hearts of the Whiskey Boys.

Considering this, the initial reaction in Western Pennsylvania was mild. Petitions were signed. Local luminaries like Hugh Henry Brackenbridge, William Findlay and Albert Gallatin were a moderating influence. Meetings took place in Pittsburgh and surrounding areas where talk and whiskey were dispensed liberally. The tax was evaded wherever possible, and the irritated central government brought sporadic pressure to bear on the distillers.

Over the next three years the excise act was somewhat modified but the tax was still considered unfair by the whiskey boys who conducted a tug-of-war against the government regarding the disposition of their profits. Unfortunate tax collectors, mostly locally based federal employees, were harassed and threatened. Between 1791 and 1793, a handful of excise men were roughed up and intimidated, but this was quite restrained behavior for the wild frontier of a young country which, on the issue of unfair taxation, had less than two decades earlier wrenched independence for itself by violent revolution. It seemed that sooner or later something must break loose, and in 1794, something did, with a vengeance.

It started with a carrot and ended with a stick. Alexander Hamilton called for Congress to allow alleged violators of the law to be tried in state, rather than federal courts. This might have pacified the Whiskey Boys, had not Hamilton chosen this time to crack down on past offenders. Excise collectors in Western Pennsylvania pursued tax evaders with renewed zeal. On May 30th, seventy-five distillers were summoned to Philadelphia on charges of tax evasion. What made the pill more bitter for them to swallow was the suspicion that some of the men had been selected for punishment more for their Jeffersonian views and criticism of Hamilton than for tax evasion.

On July 15th, 1794, local Marshall, David Lennox, and General John Neville, excise inspector for the western region were attacked by about forty men. Shots were fired, but no one was hurt. The next day one hundred men unsuccessfully attacked the General’s luxurious house, and on the third day five hundred rebels returned and burnt the mansion to the ground. Two weeks later they marched through Pittsburgh and peacefully dispersed. The Whisky Rebellion was over.

So why was the federal army, two months later, marching on Pittsburgh? Why were the mainly Scots and Irish settlers of this frontier area singled out for the massive show of force by the federal government? Whiskey Boys made violent protests in Kentucky, Maryland, Virginia, North and South Carolina, Georgia, the Ohio Territory, and the Northwest, and their more powerful cousins, the large distillers in the Eastern cities were also against the tax. Yet only the Western Pennsylvanians had to deal with an army. Was the Union ready to collapse, as the Federalists insisted, or was George Washington acting like George III, riding roughshod over the civil liberties of his subjects. Is the Whisky Rebellion the story of a strong government restoring law and order, or is it the tale of an oppressed minority fighting for freedom?

The rights and wrongs are unclear, but what happened in the years after the rebellion says a great deal about this country today. The government of 1794 assembled a large army, and spent a great deal of money to subdue a few frontiersmen, deploying overwhelming force against a ragtag rabble of farmers and laborers. The administration made its point, and took some of the rebels on a tour through the justice system. Court cases dragged on, but the only two men convicted of treason were pardoned, albeit on most unflattering grounds.

Having established its authority the government was seemingly incapable of carrying out what it had been attempting since 1791. Hamilton watched in frustration as local courts, lawyers, and sympathetic judges thwarted his excise men. Of fifty criminal charges brought between December 1796 and November 1800, not one resulted in the imposition of the full penalty laid down by the law. Many of the cases were thrown out. Evasion of the taxes continued.

So the significance of the Whisky Rebellion does not lie in the character of the protagonists. It lies in the fact that, where other societies seem to fly apart in the face of change and rebellion, America flourishes in a state of constant ferment. Americans challenge the restraints of any authority that they have freely elected to judiciously restrain them. American society is routinely stressed by violent change. Other societies, more in awe of presidents and kings, less inclined to irritate the powers that be, might be destroyed. America thrives.