Happy Repeal Day!

Tax News RepealDay

On this day 81 years ago, the 21st Amendment to the U.S Constitution passed, ending the prohibition of alcohol in America. While the freedom to enjoy a cold beer or tasty cocktail is great, especially this time of year, there are strings attached—that’s right, taxes.

But first, the background. You’ve all seen the mob movies and wondered what those cool speakeasy bars were really like. But what actually happened way back then when a simple brew after a long day of work wasn’t an option?

It all started in the late 1800s when people believed that alcohol was the root of all evil. Prohibition and Temperance movements continued to grow in popularity in the early 19th century and before you knew it, on January 16, 1919, the 18th Amendment was passed, outlawing the manufacture, sale, and distribution of alcohol. Or so they thought.

Turns out, the demand for booze skyrocketed shortly after the 18th Amendment passed, and organized crime (here’s looking at you, Al Capone) swept in to supply illegal alcohol to thirsty consumers. To make matters worse, state governments lost billions in tax revenue.

Prohibition quickly lost popular support, but it wasn’t until 13 years later on December 5, 1933, now known as Repeal Day, that the 21st Amendment was passed to end Prohibition and save the day. But there’s a catch. Alcohol is taxed and it’s considered a Sin Tax so you’re actually paying more than you think for your favorite boozy treat, which could have a big impact on your savings.

Now that you’re informed, raise your glass in honor of Repeal Day and toast to those before us who made it possible.

 

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