Fireworks. Barbecue. Cold Beer. These are hallmarks of American Fourth of July celebrations. As Chicago and the rest of the nation celebrated their country turning the big 250, some might be surprised to learn that the country’s alcohol taxA tax is a mandatory payment or charge collected by local, state, and national governments from individuals or businesses to cover the costs of general government services, goods, and activities. is almost just as old.
What started over 200 years ago as an isolated federal tax on whiskey is now applied across all categories of alcohol and, for most, at nearly every level of government. Crack open a beer anywhere in Illinois and you will be paying it forward to the federal, state, and local governments.
In Chicago, a carry-away 12-pack of beer gets slapped with more than $2.00 in tax. The $1.01 in federal, state, and county alcohol taxes piles on top of the 1.5 percent city tax and the 10.25 percent general sales taxA sales tax is levied on retail sales of goods and services and, ideally, should apply to all final consumption with few exemptions. Many governments exempt goods like groceries; base broadening, such as including groceries, could keep rates lower. A sales tax should exempt business-to-business transactions which, when taxed, cause tax pyramiding. . The combined burden makes taxes the single most expensive ingredient in many Americans’ drink of choice.
This is a preview of our full op-ed originally published in Chicago Tribune.
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