This is still routinely done to avoid ethanol taxes. It's called "denatured alcohol". Ethanol that has been poisoned is not considered drinkable alcohol, so not subject to the taxes on drinkable alcohol.
https://www.ecfr.gov/current/title-27/chapter-I/subchapter-A...
The only purpose is not to "jeopardize the revenue."
In that respect, regardless of the rate being levied, the result on behavior was intended to be very strict and immediate.