The Devil Went Down To Georgia

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The Devil Went Down To Georgia

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Entrepreneur Series | Lesson 2: Incorrectly Pricing Your Product Or Service

June 19, 2013

Charlie Daniels won the Grammy Award for Best Country Vocal Performance in 1979 for "The Devil Went Down to Georgia", which reached No. 3 on the Hot 100 in September 1979. Almost everybody can name that tune the moment they hear it on the radio. Even if the Devil does come down to Georgia, here is one thing they won't want to do in this state if they are making a smart money move . . . drink beer. But does it pay to be a 'sin tax' consumer in Georgia?

'Sin Taxes' as we often hear them called are a form of sumptuary taxes. Sumptuary taxes are ostensibly used for reducing transactions involving something that society considers undesirable, and is thus a kind of sumptuary law. Sin tax is used for taxes on activities that are considered socially undesirable. Common targets of sumptuary taxes are alcohol, tobacco, gambling, and vehicles emitting excessive pollutants. Sumptuary tax on sugar and soft drinks has also been suggested from time to time. Some jurisdictions have also levied taxes on illegal drugs such as marijuana. (source: wikipedia)

The facts are that when it comes to spending money on sinful desires, it's just plain better to do it in some states versus others. Now, having a six-pack of Billy Beer isn't going to be cheap in general, but it will cost you more tax in the state of Georgia than in just about any other state. Tennessee, Alaska, Alabama, and Georgia are now among the top states to purchase a six-pack of beer charging more than 50 cents a six pack in sin tax alone. Oddly enough, Missouri, which is home to Anheuser Busch, is among the cheapest of the states with only three cents of tax per six pack. Other tax friendly states include Wyoming, Wisconsin, and Colorado. Do you see the trend here? Perhaps we need to start brewing more beer in Georgia if we want a break in our taxes for this 'sinful' pleasure.

What really boggles my mind is that we are on the very high end of the scale when it comes to beer tax, but Georgia goes on the exact opposite end when it comes to cigarette taxes. When looking at a comparative analysis of overall taxes, places like New York ranks the highest with a $4.35 tax, with Rhode Island and Connecticut not too far behind at $3.50 and $3.40 respectively with overall tax. Georgia is ranked on the other end of the spectrum at 48th with a $.37 cent tax per pack with Virginia being the lowest at .30 cents per pack and Louisiana not far behind at .36 cents per pack. (source: tobaccofreekids.org)

If we look at gambling (excluding the Lottery), Pennsylvania as a state took in the most revenue in 2012 with over 1.5 billion (visit Pittsburgh if you haven't seen it in a decade or two as the downtown area is really nice), as Nevada and New York followed second and third with an overall 800 million in revenue. Other states like Kansas and Ohio have now introduced casinos to create additional revenue for the state and grew substantially from last year. Georgia doesn't even have any casinos, so I guess you wouldn't have the opportunity to be a true sinner here and create some sin tax by playing a few hands of blackjack.

Hypothetically if you were a sinner, the logical analysis would be to figure out what is the best state from a money standpoint to be on the low end of all of the sin taxes. With low soda/sugar tax, low cigarette tax, gambling bordering the state, reasonable lottery tax, and only Billy Beer being expensive, Georgia doesn't rank to be a bad state to live in overall when it comes to sin taxes. In fact, no states in the South rank in the top 10 when it comes to the percentage of overall state revenue derived from sin taxes. Maybe Charlie Daniels had a Nostradamus like moment in 1979 when he had the smash hit The Devil Went Down To Georgia. Just a smart money move to save some tax!

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About the author

Ted Jenkin

Ted Jenkin

CEO and co-Founder

Hey!

My friends and family all think I'm a workaholic, but I say I'm just a guy that loves to help people do better in life.

My mother is still the only one that calls me by my real name Theodore Michael, my wife calls me Teddy, but for the rest of you it is just plain old Ted.

Ever since I was a little kid, I always loved money and being an entrepreneur. In fact, I still have cassette tapes of me talking to my grandmother at the age of five and my mother tells me all the time how much I played with money as a kid...

Ted Jenkin is a frequent guest columnist for the Wall Street Journal and Headline News Weekend Express. He is the co-CEO of oXYGen Financial. You can follow him on LinkedIn @ www.linkedin.com/in/theceoadvisor or on Twitter @tedjenkin.

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