Beer Tax and Consumption Maps

Unless I'm reading the legend on that first map wrong, those State Excise Tax rates for beer aren't for "12 oz. containers" as they seem to imply - "How much tax will you pay on a can of beer?" - but per gallon. See STATE TAX RATES ON BEER

 

This data makes no sense to me. GA has the 3rd highest tax rate on beer? Weird, because Georgia has some of the lowest craft beer prices in the country in my experience.

 

This map is super wrong. Based on MN excise tax it shows at $.48/gal, MN is less than $.15/gal for anything stronger than 3.2

Map is bad.

 

From a UK standpoint you are hardly taxed at all ! Tax over here is having a serious effect on sales-it's gone up by 52% since 2004 but the tax take has hardly changed as sales have fallen by 20%.We are threatened with a further rise of 15 cents a pint in the next Budget.

 

KY is higher than that. Between the excise tax, the distributor tax and the sales tax, it is way higher than the map suggests. Until recently, booze wasnt sales taxed in KY because of the other two. But, when they were going to raise the distributor tax, the outcry led to them applying the sales tax instead. Which was sneaky, because most people didnt notice. Price on the shelf didnt change and most people are used to paying sales tax anyway.

Edit: From a quick calculation, I would think about 15-16 cents for a can of Bud, vs the 8 cents in the map.

Edit2Edit: If I ignore the sales tax and lower my price of Bud a bit, I could get it down to 8 cents. Im guessing that is what they didnt include for KY.

 

i do not think townhall.com is very concerned with facts.
also, correlation does not imply causation. the entire premise is a fallacy, at least not without some better follow through.
kind of disturbing.

 

Without showing the correlation mathematically, it's hard to even say if there's a correlation worth writing about. It's obvious that higher taxes will result in higher prices and thus lower consumption ceteris paribus, but that condition is hard to test. State-specific distro rules, transport costs, land and wage costs, and consumer preference all vary by region and state.

Partly what this shows is that state excise taxes on beer are small, and the differences in state taxes are often dwarfed by the noise in store-to-store pricing differences, deposit rules, etc.

 

As an economic and policy professional this makes my head hurt. First statistically I can already determine without calculating that there us no significant correlation between tax rate and consumption rates. Also as previously mentioned correlation is not causation.

 

And even if there was causation, in which direction?

Does lower taxes cause more drinking, or does a higher drinking population resist tax increases? When you consider the whole "bootlegger and baptist" cooperation, it could go either way.

 

I don't know. but I know this, prices goes up I drink less. That you can take to the bank....

 

@marquis,
I was just reading that on Pete Brown's blog, and about how it's specifically hurting the growth of microbreweries and the profit margin of midsized breweries like Fuller's. Sounds brutal.

 

Most surprising to me, if the data are right, is that Alaska has the highest tax on beer in the country.

"To finance state government operations, Alaska depends primarily on petroleum revenues and federal subsidies. This allows it to have the lowest individual tax burden in the United States,[72] and be one of only five states with no state sales tax, one of seven states that do not levy an individual income tax, and one of two states that has neither." http://en.wikipedia.org/wiki/Alaska#Taxes

What am I missing?

 

Alaska has one of, if not the highest rate of alcohol abuse in the US. I suspect the high tax rate may be more to reduce consumption than to raise revenue.

 

Do they have FUI in Alaska? Flying under the influence.

 

Here in Brazil people are so used to high taxes that nobody cares that the government has a tax of 56% for beer.
http://www.brazil-help.com/taxes.htm

 

This was the exact same thing I thought when I saw this. I could see our draft beer taxes being higher than other states because the prices at bars suck here. The prices at bottle shops are always cheaper than the surrounding states.

 

Than the surrounding states and the rest of the country. Its obvious though the distributors are just unorthodox in being nice and eating the cost.

In all seriousness though, I really don't get how our taxes are one of the highest when our prices are one of the lowest. It's counterintuitive unless we have some major price changes being done by the retailers everywhere else. That would mean they have way bigger profit margins than the ones here but I'm sure that's not true.

 

To be honest, your alcohol tax rates are so low as to be non-existent. In Australia, we have a tax on beer at about $45 per litre of pure ethanol which equates to about $9 per gallon of 5.5% beer. Coincidently, we also have beer consumption 25% higher than that in the US.