U.S. Federal Alcohol Taxes in the 21st Century

Every now and again in the course of the projects we develop, we come across data that is, in and of itself, pretty interesting. Today, it provides an opportunity to visualize the U.S. government’s revenues from the excise taxes it imposes on alcohol-based beverages. The following chart visualizes the rolling four-quarter total of U.S. federal alcohol taxes in the 21st century, covering each quarter from the end of 2000 through the recently ended quarter in June 2018.

We’ve opted to show the rolling four quarter total of all federal excise taxes on alcohol-based beverages as a way to annualize the data, which allows us to account for the annual seasonality in the quarterly reported data. In our next chart, we’ve calculated the annualized amount of federal alcohol taxes per adult, based on our estimate of the Age 21 and older resident population of the United States, for the period from December 2000 through June 2018.

Some quick observations:

• The excise tax rates that the U.S. government has imposed on alcohol-based beverages have been stable through this point of the 21st Century.
• At the same time, the U.S. government imposes different excise tax rates on different types of alcohol-based beverages.
• Our chart showing the amount of alcohol taxes per American legal drinking-age adult shows a generally increasing trend from 2000 through 2018. This trend may be the result of Americans consuming an increasing amount of alcohol, Americans shifting their alcohol consumption to favor beverages that are taxed at higher rates, and quite possibly, both.
• Looking at our chart showing the rolling four quarter total of U.S. alcohol tax revenues, recessions would appear to have a relatively negative effect on the alcohol consumption patterns of Americans, where they dial back their consumption when times are tight.
• But there’s a much bigger, as yet unexplained effect in periodically reducing that consumption, which is evident in the quarters from December 2012 through June 2014, and later from June 2015 through March 2016, both of which fall outside the National Bureau of Economic Research’s official recession dates.

We say “unexplained”, because as yet, we don’t know what’s behind those dips. And because we don’t, we may have found a new project to develop.

In the meantime, if you want to find out more about U.S. Drunk Tax History, check out TaxNotes’ podcast on the topic!

References

U.S. Alcohol and Tobacco Tax and Trade Bureau. Tax Collections. [Online Documents]. Accessed 18 August 2018.

U.S. Internal Revenue Service. Federal Excise Taxes or Fees Reported to or Collected by the Internal Revenue Service, Alcohol and Tobacco Tax and Trade Bureau, and Customs Service. 1999-2016. [Excel Spreadsheet]. Accessed 18 August 2018.

U.S. Census Bureau, Population Division. Monthly Population Estimates for the United States: January 1, 1959 to June 1, 2018. [Online Database]. Accessed 18 August 2018.

U.S. Census Bureau, Population Division. Intercensal Estimates of the Resident Population by Single Year of Age and Sex for States and the United States: April 1, 2000 to July 1, 2010. [CSV Data]. 12 December 2016. Accessed 18 August 2018.

U.S. Census Bureau, Population Division. Annual Estimates of the Resident Population by Sex, Single Year of Age, Race, and Hispanic Origin for the United States: April 1, 2010 to July 1, 2017. [Online Database]. 12 June 2018. Accessed 18 August 2018.