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Cake day: December 16th, 2023

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  • Both systems are purposefully inefficient and byzantine because it increases tax revenue for the state (and bribes for the state government).

    The 3 tier system is where alcohol must be sold by the producer to a distributor, by the distributor to a bar/liquor store, and by a bar/liquor store to the consumer. This effectively allows the state to collect tax 3 times on any one serving of alcohol. Unfortunately, it also results in higher prices and less choice for consumers. You can’t just buy liquor on amazon and have it mailed to your home, you (sometimes) can’t just buy from a local distillery, and you have to pay extra for the distributor to do a lot of not very much.

    The dealership system allows local government to collect sales tax on resident’s cars and allows local government officials to collect bribes from car dealers whose entire business relies on their competition being illegal. Without dealerships, you could just order a car from a manufacturer to be shipped to your home and you could buy it without cutting a dealer in, but the local government wouldn’t get the sales tax income and your mayor or whatever wouldn’t get to collect as many bribes.