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Yes most of the water use to produce beef is indirect, in growing the feed. If beef is taxed to consumers it will reduce demand, which will reduce the demand for feed, which will reduce the consumption of water. Decreasing the demand for cereal will decrease its cost, not increase it.

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You're somewhat shifting the goal posts here. The OP was suggesting taxing meat in proportion to their water usage, which would then presumably be spent on water reclamation projects or whatever. But the direct water usage of meat is completely negligible, which leaves you in this weird scenario where you're trying to tax somebody for water that they didn't use. So you're left to tax water usage at the source, and that's going to hit plants far harder than meat.

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