Final answer:
The conspiracy between distillers and political parties to evade taxes would lead to government financial losses, diminished credibility, citizen demand for reform, and misappropriation of funds, summarizing option 4, 'All of the above.'
Step-by-step explanation:
The conspiracy of distillers with political parties to cheat the U.S. Government out of millions of dollars of tax revenue would have several impacts on both the government and its citizens. First, the government would face financial losses and a decrease in credibility, which can erode trust in public institutions. Secondly, citizens would likely demand reforms within the government to correct such unjust practices and restore fairness in taxation. Lastly, money intended for public services would be wrongly diverted to political parties, undermining the democratic process and potentially skewing policy in favor of those flouting the law. Therefore, the correct answer is option 4, 'All of the above.'