Taxes, revenues, and agricultural support expenditures: The United States brewing industry

This dissertation examines the relationship between beer beverage taxes and agricultural support expenditures in the United States during the 1953-1986 time period. Based on the historic relationship between the brewing industry and the agricultural sector, this study extends the traditional two sector model of tax incidence to incorporate the structure of the beer beverage industry, the intermediate goods sector, and imperfect market clearing. The simulations of alternative tax policies shows that federal and state tax increases reduce the revenue yield of the federal tax and induces greater support expenditures than revenue generated by these taxes. Technical appendices describe the construction of missing indices and provide information that extends Keithahn previous data series.; The major theoretical contributions are the extensions of the traditional two sector general equilibrium model to less than perfectly competitive situations through a factor theoretic approach that focuses on intermediate goods rather than gross capital and labor intensities. The model's parameters are estimated with a block recursive system. One major result is that the beer tax plays an important role in determining the output limit price and industry structure. Further contributions to industry organization, international trade, and agricultural economics are detailed in the study.; There are three major policy implications of this analysis. First, the imposition of product market taxes which are structurally related to support expenditures would be poor taxes to rely upon for deficit reduction efforts; they generate more expenditures than revenues. Second, closer state and federal coordination would offset some of the induced expenditures in agriculture that are induced by the imposition of the tax. Third, social goals to reduce alcoholic beverage consumption are more effective if policy is aimed at changes in preferences rather than sole reliance on product market taxes. Reliance on the tax to encourage substitution toward non-alcoholic beverages is only effective through its longer term effect on industry organization.