Somebody asked me the other day whether the Trump administration might try to walk back the 21st Amendment—to repeal Repeal, as it were. On one hand: no, this is not a thing. Don from Queens is a famous teetotaler, but he’s shown no interest in turning that personal preference into a national policy. More importantly, it takes the buy-in of both chambers of Congress and a super-majority of the states to change the Constitution.

On the other hand: look around you, man. Laws are only real when they’re enforced, and as the past month has made clear, whether they will be is an open question! The “Make America Healthy Again” regime is intentionally torching the public-health establishment! We’re through the looking glass, and the drinking glass too. So fuck it: let’s run the thought experiment.

Start by following the money. There’s a weirdly close relationship between the federal income tax and the booze business in the US that dates back to before Prohibition. In a fairly literal sense, the implementation of one allowed for the implementation of the other. “The organized drys had supported the income tax back in 1913 in order to breathe life into Prohibition,” wrote Dan Okrent in Last Call: The Rise and Fall of Prohibition. A decade and a half later, in the thick of the Great Depression, “group of powerful and well-funded wets sought to kill Prohibition so that the income tax might die as well.” Rather than Uncle Sam dipping into their fortunes, they offered up the cumulative bounty of a federal excise tax in lieu of payment.

The robber barons only partially succeeded: while Repeal went through, the US still has a federal income tax, albeit a purposefully hobbled proxy of its New Deal-era predecessor. But my basic point here is that in 1933, with Hooverville breadlines haunting the national memory, and another brewing European conflict darkening its future, United States’ beverage-alcohol industry’s potential tax revenues were crucial to sustaining the American experiment.

Times change, and beverage alcohol’s share of Uncle Sam’s annual receipts have changed with them. In 2023, for example, federal excise taxes on beer, wine, and spirits generated $11.1 billion, according to a September 2024 report from the Congressional Research Service. That’s a decent chunk of change, but it’s just a drop in the bucket that is the contemporary federal coffer:

As you can see, federal excise taxes on drink are dramatically less crucial to funding a government now than they have been since World War II. Sure, the industry writ large generates many other forms of revenue for the federal government—and individual state governments, too; most have their own excise taxes, though it varies a bunch by category—via other taxes and knock-on effects. (E.g., the Beer Institute, the preferred trade group of the country’s macrobrewers, claims the brewing business alone paid $63.3 billion in federal, state, and local taxes in 2022.) But in the context of the overall federal take ($5.1 trillion in 2024) and certainly in comparison to the country’s Prohibition-era budget, today’s booze-industry revenues are pretty small beer. Ahem.

I don’t know exactly what this augurs for today’s bev-alc industry, but it strikes me as a not-great indicator, particularly given anti-vaxxer Robert Kennedy, Jr.’s confirmation last week as the Secretary of Health and Human Services (HHS), and Boer-in-Chief Elon Musk’s anti-constitutional attacks on the Internal Revenue Service, et al. Repeal may have been engineered by “the money interests,” but Prohibition was primarily an ideological battle fought by populist crusaders against capital. Now, as then, the American political economy vis-à-vis alcohol is controlled by a hodgepodge of sometimes-contradictory interests, and the ideologues are in charge.

logo

Subscribe to Fingers to read the rest.

Become a paying subscriber of Fingers to get access to this post and other subscriber-only content.

Upgrade

A subscription gets you:

Reply

Avatar

or to participate

Avatar

David Faust1 year ago

The framing you use around the fight over prohibition is all off. It was not a "populist crusade against capital". The push for prohibition came out of puritan New England and was coopted by the conservative, moralistic strain of the Progressive Movement, the same part that advocated forms of eugenics and voting restrictions-yes old school progressives pedaled these things. Also, the source cited about well funded wets wanting the income tax to go away is off as well. Senator Blaine, the author of the 21st amendment, was an arch progressive from the "populist" and civil liberties minded strain of progressivism and he believed firmly in the state and federal income tax and would have hardly been on the side of the "robber barons" who wanted repeal for lower taxes. Meaning honest people wanted prohibition repealed for honest reasons. Threats to the alc industry will be horseshoe theory, meaning it will be the health puritan left joining the moral puritan right to pedal restrictions.

Avatar

Dave InfanteAuthor1 year ago

Thanks for the comment, sorry you feel like my column missed the mark. I don't think it's a fair criticism to argue it's "all off," though—you may not like this frame or find it productive, but I don't think it's flatly incorrect, as you seem to think. I can't claim to have done all the reading here, but I've done a decent amount, and my understanding is that a flank of dry movement was made up of populist backlash to the political power of Eastern (and especially Northeastern) business interests. Okrent deals with this at some length in 'Last Call', particularly vis-à-vis William Jennings Bryan in the 1890s (the "Cross of Gold" era!) Likewise, I've seen no evidence to debunk Okrent's findings that the Association Against the Prohibition Amendment (Pierre duPont, John Raskob, et al.) wasn't a force in securing Repeal. Neither of these were singular causes, but I don't think I really present them as such in the column. (Your mileage may vary.)

Avatar

David Faust1 year ago

You are correct and I apologize for stating it is "all off", I came out a little hotter than I should have. My point was more that how people frame history has a lot to do with their perspective. There was a quasi-populist element to the push for prohibition; however, it was also a very mugwumpish reform. The mugwumps were the upper-class reformers of the Gilded Age and later folded into the ideologically diverse coalition that formed the Progressive Movement, at their core though, they were Victorian moral scolds and moral conservatives and hardly populist. WJB was a populist, but so were Milwaukee's "sewar socialists" who called for modification and repeal early on. Progressivism and a form of populism ushered in prohibition just as Progressivism and a form of populism ushered it out; one person's populism is another's "tyranny of the majority", point being history is rarely so easy as interest X vs. Interest Y.

Avatar

Andy I.1 year ago

another potential risk caused by governmental actions is retaliatory tariffs. I've seen things like where Canada is proposing to place a tariff on American booze

Avatar

Dave InfanteAuthor1 year ago

For sure! I wrote about that a bunch in the Weekender that published in the thick of the 72-hour tariff rollercoaster in late January: https://www.fingers.email/p/talk-about-a-prisoner-s-dilemma-amirite

Scroll down to the SPIRITS section, there's a bunch of detail there about the threats (which are currently suspended, because the US suspended the tariffs quickly after getting some fake concessions, but still give a sense for how our maligned trade partners are planning to retaliate if/when they resume.)