As Oktoberfest celebrations kick off around the world, let’s look at how much tax European Union (EU) countries add to the world’s favorite alcoholic beverage.
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Taxes are the single most expensive ingredient in beer, costing more than the labor and raw materials combined.
Of all alcoholic beverages subject to taxation, stiff drinks—and all distilled spirits—face the stiffest tax rates. Like many excise taxes, the treatment of distilled spirits varies widely across the states.
The tax base around the world is shrinking for traditional excise taxes, including taxes on tobacco, alcohol, and motor fuel. But newer excise taxes on things like carbon, cannabis, and ride-sharing are on the rise. What makes a good design for these taxes and where may excise taxes go in the future as the traditional “sin tax” base continues to shrink?
When designed well, excise taxes discourage the consumption of products that create external harm and generate revenue for funding services that ameliorate social costs. The effectiveness of excise tax policy depends on the appropriate selection of the tax base and tax rate, as well as the efficient use of revenues.
Younger and healthier Brits have created a $17.1 billion budget hole by smoking and drinking less. Yet, despite this resounding piece of positive news, some see any decline in tax revenues as a public finance crisis. Excise taxes target a tax base that is intended to shrink. Less consumption is a stated goal of the policy.
Facts & Figures serves as a one-stop state tax data resource that compares all 50 states on over 40 measures of tax rates, collections, burdens, and more.
Tennessee, Alaska, Hawaii, and Kentucky levy the highest beer excise tax rates in the nation. How does your state compare?
The mix of tax sources states choose can have important implications for both revenue stability and economic growth, and the many variations across states are indicative of the different ways states weigh competing policy goals.