This Washington

Beer and Taxes

By Josh Feit April 6, 2010

This post has been updated with an Excel spreadsheet and analysis from news intern Camden Swita.

Here it is:

We at PubliCola were wondering if a higher tax rate on beer (which is included in the Senate's latest revenue proposal) would impact consumption, so I took data collected by the Tax Foundation, a national tax research organization, and data compiled by the Beer Institute, a national lobbying organization for the beer industry, and mashed it all together.

There seems to be some correlation between a decrease in the beer tax rate and an increase in consumption—Nevada, North Dakota and Montana lead the pack in consumption and have lower tax rates. But then again: Alaska has the highest tax rate and has nearly exactly the average rate of consumption.

And as for Nevada, North Dakota, and Montana, there's really no surprise there; what goes better with gambling and guns than beer?

Original Post:

According to data from a D.C. think tank called  the Tax Foundation, it looks like the state Senate's .50 a gallon beer tax proposal would bump Washington state's rate to .76 a gallon, which would put Washington state 7th behind Alaska, Alabama, Georgia, North Carolina, Hawaii, and South Carolina in the list of states with the highest beer taxes.

Courtesy Jason Mercier at the Washington Policy Center.

My question is this: Do the high taxes inhibit beer consumption? Or are they a sign of states with high beer consumption (meaning the states with the highest beer taxes know how to make some money off their derelict citizens?)

The top 10 beer drinking states (gallons consumed per year) are: Nevada, New Hampshire, North Dakota, Montana, South Dakota, Wyoming, Wisconsin, New Mexico, Texas, and Louisiana. (South Carolina, the the 6th highest beer tax state is No. 11 in consumption.)

Washington state consumes 27.9 gallons a year, according to the Beer Institute, which means we are light weights, ranking 41st when you judge states by their beer drinking.
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