What is a proof gallon? Can the calculator be used to estimate revenue for taxes levied by proof gallon?
A “proof gallon” is a gallon of beverage that is 50% alcohol by volume, or “100 proof.” The tax calculator was designed to estimate revenue from volumetric tax increases (e.g. a ten-cent tax increase per gallon of beer sold), rather than proof gallon based taxation, because almost all alcohol sold in the US is currently taxed by volume. (The federal government is a notable exception, taxing spirits –and only spirits–by proof gallon.) The idea of switching to taxing alcohol by proof gallon has been gaining popularity because some lawmakers believe it is more fair to tax alcoholic beverages based on the amount of alcohol they contain. You can use the calculator to estimate revenue increases from taxes levied in proof gallons, using the simple conversions shown below: Beer: Desired new proof gallon beer tax rate – current per gallon tax rate for beer: 11.1 For example, at the federal level, beer is currently taxed at $.58 a gallon. If you wanted to know how much revenue would be raised
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