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Implicit Taxes Collected by State Liquor Monopolies

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Abstract

State monopolization or taxation aresupposedly justified because of negativeexternalities from alcohol consumption, butrecent research questions the efficacy ofsuch policies, suggesting that their actualgoals may be revenue-generation.Consideration of this hypothesis isfacilitated by estimates of the implicittaxes charged in monopoly states, whichgenerally are substantially higher thantaxes in non-monopoly states. Evidencethat monopolization and high taxes do notaffect the level of externalities is alsoexplained by adjustments that rationalindividuals make to avoid the consequencesof such policies, thus providing furthersupport for the revenue-maximizationhypothesis.

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Authors and Affiliations

  1. Department of Economics and DeVoe Moore Center, Florida State University, Tallahassee, FL 32306, U.S.A.

    Bruce L. Benson

  2. DeVoe Moore Center, Florida State University, Tallahassee, FL, 32306, U.S.A.

    David W. Rasmussen

  3. Federal Communications Commission, Room 6C-162, Washington, D.C, 20554, U.S.A.

    Paul R. Zimmerman

Authors
  1. Bruce L. Benson
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  2. David W. Rasmussen
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  3. Paul R. Zimmerman
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Benson, B.L., Rasmussen, D.W. & Zimmerman, P.R. Implicit Taxes Collected by State Liquor Monopolies. Public Choice 115, 313–331 (2003). https://doi.org/10.1023/A:1024240400780

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