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Alcohol taxes save lives

By Kay Bell · Bankrate.com
Tuesday, September 28, 2010
Posted: 11 am ET

Researchers at the University of Florida say that an increase in alcohol taxes would mean a 35 percent reduction in alcohol-related deaths.

And the life-extending benefits of hiking alcohol taxes don't end there, according to "Effects of Alcohol Tax and Price Policies on Morbidity and Mortality," published in the American Journal of Public Health.

Higher taxes on potent potables (yes, I watch Jeopardy) would be good news for others, too. Traffic fatalities would drop by 11 percent, there would be a 6 percent reduction in sexually transmitted diseases, a 2 percent drop in violence and 1.4 percent less crime in general.

Alexander Wagenaar, professor of health outcomes and policy at the University Of Florida College Of Medicine and the lead researcher on the study, says the cost of alcohol is directly linked to the beverage's consumption.

A 2009 study found that when alcohol taxes were reduced by one-third, consumption of alcohol increased by 10 percent. So raising taxes on alcoholic beverages should have the opposite effect.

"The strength of these findings suggests that tax increases may be the most effective way we have to prevent excessive drinking, and also have drinkers pay more of their fair share for the damages caused and costs incurred," says Wagenaar. "Thousands of lives could be saved and millions of health care costs -- many millions of health care costs -- averted if the taxes were adjusted to stay up with inflation, for example, or raised a notch."

But not all are toasting the findings. The university's study was funded by the Robert Wood Johnson Foundation, a public-health-oriented nonprofit. The issue is taking on more importance as state and local governments, facing budget shortfalls, look for ways to increase their revenue sources.

It's no surprise that the alcohol industry disagrees with the study's findings.

"Numerous studies, including research from the National Institute on Alcohol Abuse and Alcoholism, show that alcohol abusers are the least sensitive to tax increases," said Distilled Spirits Council President Peter Cressy. "It is the moderate responsible consumer who cuts back the most when prices rise."

Much to the dismay of my dear grandmother, who looked askance at any liquor in her home -- a position challenged each Christmas when family gatherings included holiday imbibing -- I must side with the Distilled Spirits folk. Individuals who excessively surrender to their vices will not be deterred by paying a bit more for their drinks.

While the numbers can be batted back and forth by the opposing sides, I suspect that this is a study that lawmakers will love. As I've blogged before, sin taxes are an increasingly popular way for cash-strapped governments to raise money.

Look for this to happen in connection with alcohol excise taxes now that lawmakers have scientific cover for the increased taxes.

Would higher prices prompt you to become a teetotaler? Or would you find a way to pay for your favorite brew?

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1 Comment
joe
September 28, 2010 at 3:54 pm

If you drink enough that a reasonable tax on alcohol would prevent you from drinking, you my friend would be a hard-core alcoholic. Government has no place taxing to produce some desired behavior. Taxes cannot create responsibility.