THE INVERSE-ELASTICITY RULE. Oregon proposes a tax of $52.21 per barrel of beer, up from the current $2.60. There is a Pigouvian dimension to this tax, as some of the money will go for drug treatment programs. The excess burden of a tax is lower, all else equal, on goods with less elastic demand, although, as a commenter at Betsy's Page notes, Oregonians can bring the stuff in from California, Idaho, or Washington.