Why are State Taxes Less Progressive?
Oregon is planning to raise its tax on beer by 1,900%, which seems like both an irresistible tax-day story and a good chance to write about the differences between state and federal taxes. In general taxes on consumption goods with negative externalities — like cigarettes and gasoline and, arguably, alcohol — are desirable. But taxes on non-luxury consumption goods also tend to be regressive: Bill Gates might be worth a million times as much as the average American, but he does not, alas, consume a million times as much beer. Probably not even half that.
