2 thoughts on “Beer taxes!

  1. A note on how beer taxes are regressive, and how this will cause those taxes to be more regressive…

    A recent analysis by the Beer Institute found that households earning less than $50,000 per year pay half of all beer taxes, while accounting for less than one-fourth of all income earned in the U.S. This same study found that beer taxes are actually 6.5 times higher as a percent of income for lower-income households (those earning less than $20,000 per year) compared to higher-income households (earning $70,000+ per year). As a result, the tax on beer is one of the most regressive of all taxes in the federal and states? tax codes (Chamberlain and Prante, 2007; Beer Institute, 2008).

    The average price per bottle (nationally):
    Tax Detail on a ?Per-Bottle? Basis
    Total Consumer Cost Per ?Bottle? (12 ounces) $1.16
    Breakdown of 40.6% of cost that is taxes:
    Beer-specific taxes $0.08
    Other sales, excise and direct taxes $0.17
    Federal income, payroll, and other taxes $0.20
    State and local income, payroll, and other taxes $0.02
    Sum of Taxes $0.47

    SAB Miller, Molson-Coors, and Budweiser control a combined 80% of beer sales. On top of this, anything that produces more than 15k barrels annually is considered a regional brewer, which includes Sierra Nevada, Sam Adams, and even our beloved Sweetwater. For reference purposes, Sweetwater produces 50k barrels annually.

    Unfortunately, this tax will hit just about all beers.

  2. Good thoughts, Nate. Sweetwater’s 50,000 BBL’s puts this in perspective a little bit. Good thing we don’t live in Washington State, I guess.

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