April 7 is National Beer Day. The unofficial holiday (sorry, you won’t get the day off) marks the date that beer was allowed to be legally manufactured and sold following a long, dry Prohibition. On March 22, 1933, President Franklin Roosevelt signed the Cullen–Harrison Act into law, which moved the U.S. away from Prohibition. After he signed, Roosevelt reportedly remarked to his aide Louis Howe, “I think this would be a good time for a beer.”
Prohibition—which remained in place for a few more months—reportedly cost the federal government $11 billion in lost tax revenue, not counting the cost of enforcement.
Here are a few more facts about beer—and its close relationship to tax—to help you celebrate in 2021:
Egypt was likely the first civilization to tax beer. Queen Cleopatra imposed a tax on beer to, she claimed, discourage public drunkenness, though it is believed that the tax was used to raise money to finance her wars.
Beer is the most popular alcoholic beverage in the United States. According to a 2019 Gallup poll—the last year the survey was conducted—38% of Americans who drink alcohol said they preferred beer, a few percentage points lower than in 2018. In 2019, the federal government collected $3.4 billion in excise taxes on domestic and imported beer.
Beer taxes aren’t insignificant. In the U.S., taxes on the production, distribution, and sale of beer typically eat up 40% of the retail price.
The federal excise tax works out to about six cents per drink for a regular beer. The federal excise tax is equivalent to about 10 cents per ounce of pure alcohol—a lower rate than the alcohol content of distilled spirits.
Beer generates jobs and tax revenue. According to the Beer Institute, the beer industry in 2018 employed nearly 2.1 million Americans, directly and indirectly, generated more than $328 billion in economic activity, and raised almost $59 billion in tax revenue. Unfortunately, due to Covid, in 2020, the U.S. lost more than 568,000 jobs supported by the beer industry.
The pandemic impacted online beer sales. Covid may have hit the entertainment industry hard, but online sales of beer were up. In 2020, total online beer sales increased by 233%. Beer sales totaled more than $43.7 billion in U.S. multi-outlets, a 14.7% increase over 2019.
Poorer households pay a disproportionate amount of beer taxes. According to a report presented to the Senate, U.S. households earning less than $50,000 make less than one-fourth of all income earned in the country but pay half of all beer taxes.
To help pay for the Civil War, Congress imposed an excise tax on beer. The Revenue Act of 1862, signed into law by President Abraham Lincoln, referred to the word beer 23 times,…