Moonshine and it's effect on the U.S. economy - Term Paper Example

However, this prompted the rise of illegitimate businesses that came in the form of moonshiners, and organized crime. The crime came in the form of criminals willing to transport and distribute alcohol for capital. It was known as moonshining since the brewing of alcohol was done in the night. This paper will review the effect moonshining had on the U.S. economy, and the decline of the business after the repealing of the laws of prohibition. The disruption of normal activities in the local breweries and taverns made it exceedingly difficult for the residents to make a living (Miller 35).

The sale of alcoholic beverages that had a percentage of more than 2.5% was illegal. This meant that all the activities being carried out were illegal. This was as the amendment dictated. What this disruption in business created was an economic, and social problem that affected the economy, and people of the nation respectively. In the economy, there was the disruption of the tax revenue. This was the tax revenue that was to be collected through legitimate sales of alcohol and other alcoholic beverages.

This caused the economy to fall since the number of companies conducting business went down. This loss meant that the government had to look for alternative sources of revenue, other than that brought in from the brewing companies. This move presented a problem since other local traders suffered the brunt of this law (Caraway 35). The tax increment placed on their goods and services made it hard for them to stay in business for long, and still make profits. The rise in illegitimate business transactions made it hard for tax to be collected as it should.

Organized crime came into existence since there needed to be importation and distribution of illegal alcohol. The law of prohibition prevented the sale of alcohol. However, it did not prevent the prevailing rate of illegitimate businesses that would follow