Author Topic: Trying to understand state excise taxes on beer.  (Read 2605 times)

Offline passlaku

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Trying to understand state excise taxes on beer.
« on: January 19, 2013, 01:39:58 PM »
I saw this posted the other day:
http://taxfoundation.org/blog/monday-map-state-beer-excise-tax-rates-0



A slight correction of the numbers are here (from the Beer Institute):
https://www.documentcloud.org/documents/325601-excisetaxrate.html

I was wondering what you guys thought might make these tax rates vary by state? Let me tell you that I punched these numbers into SPSS (stats software), used OLS regression, and found that %Christian, %liberal, perCapita car fatalities, property tax rate, and #breweries per state all had no effect.  It was all state level data.  I am leaving out of this explanation the one and only variable that had a coeeficient that was significant (it is positive and a can of worms).  I am thinking of writing this up, but am interested in including more "controls" or explanations that help us understand state excise tax policy.  What do you think the model is missing?  I should probably include medianIncome and maybe percapita # of breweries in the state. 

« Last Edit: January 19, 2013, 01:42:11 PM by passlaku »

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Re: Trying to understand state excise taxes on beer.
« Reply #1 on: January 19, 2013, 01:43:21 PM »
I don't think there's much mystery. States with breweries big enough to do substantial lobbying (CO, TX, MO, WI, PA) have low taxes.
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Offline passlaku

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Re: Trying to understand state excise taxes on beer.
« Reply #2 on: January 19, 2013, 01:47:38 PM »
Big breweries might matter but #of breweries doesn't.  Maybe I should get a figure for the number of brewery employees for each state.  The more people are employed by breweries then the lower the taxes on beer, right?

Offline nateo

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Re: Trying to understand state excise taxes on beer.
« Reply #3 on: January 19, 2013, 01:48:38 PM »
I don't think there's much mystery. States with breweries big enough to do substantial lobbying (CO, TX, MO, WI, PA) have low taxes.

^ Nailed it. Except Wyoming, they just don't really have taxes there.
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Offline redbeerman

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Re: Trying to understand state excise taxes on beer.
« Reply #4 on: January 19, 2013, 01:56:34 PM »
I don't think there's much mystery. States with breweries big enough to do substantial lobbying (CO, TX, MO, WI, PA) have low taxes.

^ Nailed it. Except Wyoming, they just don't really have taxes there.

Or people from what I remember.  Population density is the next to lowest in the country, next to Alaska.  Western Wyoming is beautiful.
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Offline passlaku

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Re: Trying to understand state excise taxes on beer.
« Reply #5 on: January 19, 2013, 01:58:50 PM »
Alright.  So if you exempt those 5 states, what explains the rest?

Offline hopfenundmalz

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Re: Trying to understand state excise taxes on beer.
« Reply #6 on: January 19, 2013, 02:05:42 PM »
I don't think there's much mystery. States with breweries big enough to do substantial lobbying (CO, TX, MO, WI, PA) have low taxes.

ABInbev also have breweries in CA, GA, VA, NY, NH, FL, VA.

MillerCoors also in CA, GA, NC, VA.

Not all are low tax states. Just saying.
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Offline nateo

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Re: Trying to understand state excise taxes on beer.
« Reply #7 on: January 19, 2013, 02:12:22 PM »
Alright.  So if you exempt those 5 states, what explains the rest?

Well, I'm not going to run the regressions, but it sounds like you have, so you tell us.

This might help: http://alcoholjustice.org/campaigns/charge-for-harm/450-neglected-and-outdated-state-beer-taxes.html

Maybe legislators in some states are just lazy?
« Last Edit: January 19, 2013, 02:15:23 PM by nateo »
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Re: Trying to understand state excise taxes on beer.
« Reply #8 on: January 19, 2013, 02:15:53 PM »
ABInbev also have breweries in CA, GA, VA, NY, NH, FL, VA.
MillerCoors also in CA, GA, NC, VA.
Not all are low tax states. Just saying.

Fair point, but if you except the South, where they're just into that kind of thing, it still applies.
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Offline hopfenundmalz

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Re: Trying to understand state excise taxes on beer.
« Reply #9 on: January 19, 2013, 02:31:35 PM »
ABInbev also have breweries in CA, GA, VA, NY, NH, FL, VA.
MillerCoors also in CA, GA, NC, VA.
Not all are low tax states. Just saying.

Fair point, but if you except the South, where they're just into that kind of thing, it still applies.

I missed NJ. You are probably right. Big business often has many reasons to locate a facility, taxes are just one.

I am wondering what the can of worms correlation is.

 
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Offline nateo

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Re: Trying to understand state excise taxes on beer.
« Reply #10 on: January 19, 2013, 02:37:01 PM »
Fair point, but if you except the South, where they're just into that kind of thing, it still applies.

GA and AL have a "uniform statewide local excise tax." I have no idea what that means, but the state excise tax for GA is actually $0.48 and AL is $0.53. And Wyoming passed their tax back in 1935.

The rate in that graphic for WA is actually the old "high tax" rate. The new 2010 WA "high tax" rate for beer is $0.76, and the "low tax" rate for small and domestic breweries stayed the same at $0.15. I haven't checked the other numbers in the graphic, but at least that one is wrong.
« Last Edit: January 19, 2013, 02:45:18 PM by nateo »
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Offline passlaku

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Re: Trying to understand state excise taxes on beer.
« Reply #11 on: January 19, 2013, 02:42:50 PM »
Quote

Well, I'm not going to run the regressions, but it sounds like you have, so you tell us.

This might help: http://alcoholjustice.org/campaigns/charge-for-harm/450-neglected-and-outdated-state-beer-taxes.html

Maybe legislators in some states are just lazy?

I was just running the numbers yesterday and according to my analysis the only variable that had a significant coefficient was %populationBlack.  According to the regression model, as %Black increases so does tax on beer (about .40 cents for every percentage point). 

I told you it was a can of worms. This finding is, however, consistent with some of the prohibition literature I have read (check out Okrent's Last Call).  This also seems analogous with some of the the political science (my day job) research in other policy areas.  I suppose if I include other variables like median income the relationship between race and beer tax might disappear. 

Offline nateo

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Re: Trying to understand state excise taxes on beer.
« Reply #12 on: January 19, 2013, 02:47:18 PM »
I was just running the numbers yesterday and according to my analysis the only variable that had a significant coefficient was %populationBlack.  According to the regression model, as %Black increases so does tax on beer (about .40 cents for every percentage point). 

what's the r^2 for that correlation?
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Offline passlaku

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Re: Trying to understand state excise taxes on beer.
« Reply #13 on: January 19, 2013, 03:02:09 PM »
The model explained about 17% (r-square) of the variation.  It is a small r-square.   

Offline nateo

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Re: Trying to understand state excise taxes on beer.
« Reply #14 on: January 19, 2013, 03:16:57 PM »
The model explained about 17% (r-square) of the variation.  It is a small r-square.

So 0.17? That's an incredibly small coefficient of determination.
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