When Nebraska and Michigan passed measures in 2021 to reduce taxes on ready-to-drink cocktails (RTDs), industry supporters of the legislation claimed consumers in Michigan would “benefit from the reduced tax rate for these popular products” (DISCUS May 24, 2021) and that Nebraska’s bill was “another great benefit for adult consumers” (DISCUS May 26, 2021). Despite these claims, consumers are not benefitting from lower prices in either state since taxes were reduced on RTDs.
Public Sector Consultants examined RTD pricing before and after the tax changes, and the analysis shows dramatic price hikes for RTDs in both states: a 44 percent jump in Michigan and a 65 percent jump in Nebraska since the legislation passed. These increases far outpaced inflation and the rapid overall increase in the consumer price index.
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