The Simplified Wealth of Nations of Adam Smith, Book 5, Chap. 2, Article 4: General Taxes -- Liquor Taxes

Chapter 2m, Article 4: General taxes -- Liquor Taxes

Liquor Taxes 190 In Great Britain, liquors for private use are not liable to any excise duties.   In the same way, malt made for private family use is not liable to excise taxes.   191 It was frequently said that more revenue might be raised by a lighter tax on malt than what is presently raised from all the heavy taxes on malt, beer, and ale.   192 In the London porter brewery, a quarter of malt is commonly brewed into more than 2.5 barrels, sometimes into 3 barrels. On an average, the total duties on malt, beer, and ale cannot be less than 288 or 300 pence on the produce of a quarter of malt.   193 The old malt tax includes a tax of: In 1774, the cyder tax produced only £3,083, short of its usual amount.     194 Malt is consumed in beer and ale breweries and in the wine and spirit manufactures.   195 It has been British policy to discourage the consumption of spirituous liquors because of their tendency to ruin the health and corrupt the morals of the common people.   196 The following objections of Dr. Davenant to this change of excise duties seem unfounded:
Charles Davenant
Charles Davenant
  197 No tax can ever reduce, for any considerable time, the profit rate in any trade which always keeps its level with other nearby trades.   198 It is not very easy to understand why it is harder for the maltster to get back 216 pence in the higher price of his malt than it is at present for the brewer to get back 288 or 300 pence in the higher price of his liquor.   199 Nothing could reduce the rent and profit of barley land which did not reduce the demand for barley. When it has been proposed to lay any new tax on sugar, our sugar planters have frequently complained that the whole taxes fell on the producer, not on the consumer. But the ordinary price of barley was never a monopoly price.   200 Only the people who brew for private use will likely suffer from my proposed changes.  

Other Taxes

201 There are several other duties which affect the price of goods more unequally and more indirectly.   202 In some small states, duties similar to those passage duties are imposed on goods carried across the territory and from one foreign country to another.   203 Such taxes on luxuries as the greater part of the duties of customs and excise, though they all fall indifferently on every different kind of revenue and are finally paid by consumers yet they do not always fall equally on every person's revenue.   204 Such taxes are or may be perfectly certain.  

Next: Chapter 2o: Taxes on Luxuries