When looking at nightclubs they fall into more than one industry; the nightclub industry, service industry and the liquor industry. This paper will discuss the industry from the view point of the liquor industry. This industry has had problems for years and the taxes on alcoholic beverages have remained relatively high throughout history, especially in the United States. This paper will also review two components of macroeconomics that effect and are affected by the sales of alcoholic beverages in the liquor industry.
Macroeconomics is the “analysis of the overall economy using information such as unemployment, inflation, production and price levels compared to microeconomics which is the economics in terms of individual areas of activity, such as the economics of a firm, a household, or of single economic components such as prices” (Teachmefinance.com, 2007). As learned from the simulation in week four of MBA 501 the three main indicators of macroeconomics are the Gross Domestic Product (GDP), the inflation rate and the unemployment rate. Out of these factors of macroeconomics the two focused on their effects in the liquor industry are the GDP and inflation.
There are certain product that are taxed multiple time one of those is liquor; “there is a federal tax, a state tax and a sales tax. The feds tax a quart of 80 proof liquor at $2.75 and in 1995 statistic the estimated consumption was approximately 2 billion gallons per year which means we paid about $22 billion dollars in federal liquor taxes” (Ganssle, 2004, ¶ 7). In 2007 the tax on liquor per gallon is $3.25 for the federal tax, not including the state and sales tax on liquor. “Taxes on distilled spirits are among the highest taxes imposed o ...