Food grade equipment and starting stock is the reason. Sure there's the "sin tax" for governments to get more money out of alcohol, but that's not the bulk of the difference. The bulk of the price difference is from the fact that you're starting with food grade materials and using food grade stills and other equipment. With non-food-grade alcohol distillation they can throw whatever they want in and, if it's a little impure, or contains some toxins it doesn't matter because no one is supposed to drink it. There is usually a lot of stuff you don't want to drink in that 5% that's in rubbing ethanol; including methanol, toxic esters, turpentine, etc; due to the stock they typically start with. Denaturing isn't just because the gum'mint doesn't want you to drink it, it's that it's not all that safe to drink to start with. And if you decide to cry "oh, why not just 100% pure ethanol", going over 95% ethanol is exceedingly hard to do and gets to be really, really expensive with each added percentage point (or fraction there of).