Wednesday, April 15, 2009

Beer Taxing

"Today is the dreaded April 15, but at least in Oregon it's even going to cost you more to drown in your tax sorrows. In their sober unwisdom, the state's pols plan to raise taxes by 1,900% on . . . beer. The tax would catapult to $52.21 from $2.60 a barrel. The money is intended to reduce Oregon's $3 billion budget deficit and, ostensibly, to pay for drug treatment."

And, according to this commentary, taxes are already the most expensive "ingredient" in beer.

Is there a bright side in this? Perhaps in the future economists will have an example of price elasticity of demand that Econ 101 students can relate to. Is beer demand price elastic?

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