ernment budget deficits (see Table 9-1).³ In addition, the rates applied to the alcohol contained in different beverages vary, with current federal taxes amounting to approximately 21 cents per ounce of pure alcohol in spirits, 10 cents per ounce of pure alcohol in beer, and 7 cents per ounce of pure alcohol in table wine (DHHS, 2000).

Because of the infrequent and modest increases in these taxes, their real (inflation-adjusted) value has declined substantially. The federal beer excise tax, for example, was set at $9 per 31-gallon barrel (16 cents per six-pack) on November 1, 1951, and maintained at that level until being doubled to $18 per barrel (32 cents per six-pack) on January 1, 1991. In real terms, however, the current federal beer excise tax is well below its 1951 value of $61.60 (August 2002 dollars). The same is true for spirits taxes, which were set at $10.50 per proof gallon ($1.68 per fifth of 80-proof alcohol) in 1951, raised to $12.50 per proof gallon in 1985, and then raised to their current level of $13.50 per proof gallon ($2.16 per fifth of 80-proof alcohol) in 1991. Again, the current tax is well below the $71.87 (August 2002 dollars) that would be needed to reach the real value of the distilled spirits tax in effect in late 1951. Federal wine taxes are more varied, with different taxes applied based on alcohol content. These taxes currently range from $1.07 per wine gallon for wine with alcohol content not more than 14 percent to $3.40 per wine gallon for champagne and sparkling wines. As with the other federal alcoholic beverage excise taxes, the inflation-adjusted values