Should Alcohol Taxes Be Raised?
Although excise taxes on beer, wine, and spirits raise about $15 billion a year in revenue for federal and state governments, current alcohol tax rates in the United States are low by historical standards. In 1980, alcohol taxes represented about 22 percent of the pre-tax price of alcohol, whereas now, with the failure to raise [...]
Alcohol/Leisure Complementarity: Empirical Estimates and Implications for Tax Policy
Sarah E. West Ian W.H. Parry Abstract This paper provides a first attempt to estimate the cross-price elasticity between alcoholic beverages and leisure, which is critical for assessing how much alcohol taxation might be warranted on fiscal grounds. We estimate an Almost Ideal Demand System defined over alcohol, leisure, and other goods, using data from [...]
