BUDGET OPTIONS, VOLUME 1: HEALTH CAREDecember 2008 pg.195
Option 108 Increase All Taxes on Alcoholic Beverages to $16 Per Proof Gallon
This option would standardize the base on which the federal excise tax is levied by using the proof gallon as the measure for all alcoholic beverages. The tax rate would be raised to $16 per proof gallon, thus increasing revenues by about $28 billion over the 2009–2013 period and by $60 billion over the 2009–2018 period. (Because excise taxes reduce producers’ and consumers’ income, higher excise taxes would lead to reductions in income and payroll tax revenues. The estimates shown here reflect those
reductions.)
A tax of $16 per proof gallon would equal about 25 cents per ounce of alcohol. Under this option, the federal excise tax on a 750-milliliter bottle (commonly referred to as a fifth) of distilled spirits would rise from about $2.14 to $2.54. The tax on a six-pack of beer would jump from about 33 cents to 81 cents, and the tax on a 750-milliliterbottle of table wine would increase by a similar amount, from about 21 cents to 70 cents.
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