Increasing Alcohol Taxes Punishes the Entire Hospitality Industry

The Distilled Spirits Council works closely with other suppliers, wholesalers and retailers to oppose all alcohol and hospitality tax increases. Responsible consumers of distilled spirits already pay more than their fair share. The Federal excise tax rate on distilled spirits is almost three times the rate on table wine and two times the rate on beer. There is a wide disparity in alcohol tax rates at the state level, as well, with spirits being taxed nearly two times higher than table wine and nearly three times higher than beer.


Raising alcohol taxes simply penalizes more than 100 million responsible beverage alcohol consumers, while doing nothing to deter abusers.

Alcohol Tax Increases Do Not Benefit the State
Beverage alcohol products rank among the highest taxed consumer items available today in the United States. In fact, direct alcohol excise and sales taxes levied at the federal, state, and local levels account for more than one-third of the shelf price of many popular brands. The result is that government at all levels earns $2 from the sale of beer, wine, and spirits for every $1 earned by producers, wholesalers, and retailers. Economic studies have consistently demonstrated that punitive taxes on beverage alcohol result in lost jobs and decreased tax revenue.

Excise Tax Increases Put Thousands of Workers out of Jobs
A tax on beverage alcohol is a tax on the hospitality industry - threatening the 4.6 million employees of manufacturers, wholesalers and retailers. Federal, state and local governments lose when excise taxes on spirits are raised. The impact is felt throughout the U.S. economy. The last federal excise tax increase on spirits resulted in:

  • A reduction in total federal alcohol excise tax revenues for the succeeding 5 years.

  • The elimination of 98,000 jobs generated directly and indirectly by the distilled spirits industry.

  • Nearly $1.3 billion in lost wages.

  • A total $1.1 billion reduction in personal and corporate income, sales, and property tax revenue to federal, state and local governments.

  • States paid out more than $150 million in unemployment benefits.

© 2011 Distilled Spirits Council of the United States
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