How Efficient are the Current U.S. Beer Taxes?

Vinish Shrestha

Journal of Economics and Political Economy, 2016, vol. 3, issue 3, 446-470

Abstract: This paper examines the status of current beer taxes in the U.S. by questioning how far away the present beer taxes are from the optimal taxes. Following the estimation of tax elasticity, I estimate the lifetime discounted costs that a heavy drinker levies on others through: 1) Years of life lost; 2) Social insurance system; 3) Drunk driving accidents; and 4) Forgone income taxes. The optimal level of beer tax ranges from 17.15 percent to 47.5 percent of the price per drink. Even the conservative estimates suggest that current beer taxes comprise only 16 percent of the external costs.

Keywords: Externality; Beer Taxation; Efficiency. (search for similar items in EconPapers)
JEL-codes: H21 H23 I10 (search for similar items in EconPapers)
Date: 2016
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
http://www.kspjournals.org/index.php/JEPE/article/download/924/988 (application/pdf)
http://www.kspjournals.org/index.php/JEPE/article/view/924 (text/html)

Related works:
Working Paper: How Efficient are the Current U.S. Beer Taxes? (2016)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ksp:journ1:v:3:y:2016:i:3:p:446-470

Access Statistics for this article

Journal of Economics and Political Economy is currently edited by Bilal KARGI

More articles in Journal of Economics and Political Economy from KSP Journals Istanbul, Turkey.
Bibliographic data for series maintained by Bilal KARGI ( this e-mail address is bad, please contact ).