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Question of the day

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* The setup

Want to stop people from drinking too much? Forget earnest public service announcements. Just make alcohol more expensive.

A study released Thursday by the American Journal of Public Health found that when the tax rate on alcohol went up, deaths caused by drinking went down.

University of Florida epidemiologist Alexander Wagenaar and his colleagues compared Alaska’s alcohol tax rate over a nearly 30-year period with deaths due to alcohol-related diseases such as cirrhosis. They found that when the tax rate shot up, deaths plunged as much as 29 percent.

Their study suggests that raising the price of booze could be a more efficient way to address the deadly toll caused by drinking than building new clinics or starting new programs.

* The Question: Should the state increase alcohol taxes to reduce drinking problems? Explain why or why not.

posted by Rich Miller
Friday, Nov 14, 08 @ 11:56 am

Comments

  1. No. Because only alcoholics drink themselves to death. The rest of the population, moderate alcohol consumers, don’t and shouldn’t be punished by having to pay more.

    Comment by cermak_rd Friday, Nov 14, 08 @ 12:02 pm

  2. “only alcoholics drink themselves to death.” You might mention that to the family of the young mother and her two beautiful kids who were killed by a drunk driver a few days ago. Then read the front page story in the Trib on Wednesday and tell us if you still feel that way.

    Comment by ilrino Friday, Nov 14, 08 @ 12:10 pm

  3. No.
    The Replacements said it best:
    “The rich are getting richer, the poor are gettin’ drunk.”

    Comment by Michelle Flaherty Friday, Nov 14, 08 @ 12:12 pm

  4. Will increasing the alcohol tax raise $5 billion in new revenue?

    Comment by Don't Worry, Be Happy Friday, Nov 14, 08 @ 12:14 pm

  5. No, do it for revenue if you want, but not as social engineering.

    Comment by wordslinger Friday, Nov 14, 08 @ 12:30 pm

  6. Yes.

    Just as the increase in cigarette taxes have caused a drop in smoking, an increase in alcohol taxes will reduce excessive drinking. If you are a casual drinker (even 1 beer/day), a $.05 per bill tax will cost you $.35/week or only $18/year. However, if you drink a six-pack per day, your tab will go up noticeably and you will probably cut back.

    As an additional benefit, it could reduce underage alcohol overdoses. Again, cigarette tax increases have reduced demand the most in younger demographics who are more price sensitive. If that trend held true for alcohol, too, you would be addressing another problem situation.

    Also, Cermak, not only does heavy drinking kill innocent people in car accidents, cirrhosis is not a cheap way to die. Unless somebody self-funds their own health care, your insurance plan or tax dollars (for Medicare/Medicaid) is paying for the dying person’s care. And if they get a liver transplant, the costs are astronomical.

    Comment by South Side Mike Friday, Nov 14, 08 @ 12:31 pm

  7. It can’t be done for revenue — at least not for permanent or reliable revenue — if the goal is to REDUCE drinking. If the tax works the way it’s supposed to, it will rake in LESS money with each passing year.

    Comment by Secret Square Friday, Nov 14, 08 @ 12:36 pm

  8. well, seeing as how I am currently in a bar, I am probablly not the best guy to comment on this, but it seems I drink less because personally I have less money these days. If I had the same amount of money, the in bar cost would not be the turn off…bars are a political hacks best friend!

    Comment by Downstate GOP Faithless Friday, Nov 14, 08 @ 12:36 pm

  9. Sure. Create an underground market for untaxed alcohol, or importation from less taxed areas, or over the state border binge drinking resulting in increased highway deaths as the drinkers weave their way back to Illinois. Social engineering always sounds great, but real life performance is problematic. Better to invent technology that prevents drinkers from driving than taxing everyone to achieve the unachievable.

    Comment by walter sobchak Friday, Nov 14, 08 @ 12:38 pm

  10. As the article noted, Alaska is a poor example, as they don’t share borders with other states and thus aren’t locked in a competitive price war. We’ve seen how oppressive tax rates and policies in IL have helped IN, MO, and WI with gamblers, smokers, and drivers. Enticing consumers of alcohol to purchase across state lines will only exacerbate our budgetary problems.

    Needless to say increasing a “sin” tax during these economic times seems like very poor public policy. Our government has failed to grasp the law of diminishing returns, and I’d prefer not to have them drooling over a new revenue source such as this one based on a single study.

    Comment by The Doc Friday, Nov 14, 08 @ 12:38 pm

  11. If they are paying for people’s health care, then yes…definitely.

    People who drink are going to have long term health care problems. Why should people that don’t drink have to subsidize their reckless behavior?

    Comment by Quotient Friday, Nov 14, 08 @ 12:42 pm

  12. How would we put up with our state’s problems without alcohol? Imagine how much we’d complain with a clear head.

    Comment by Ken Friday, Nov 14, 08 @ 12:43 pm

  13. The purpose of taxes, whether income, sales, “user fees” or property, is for citizens to pay for legitimate government services. Taxes are not a tool by which government should exercise a soft control over the citizenry. There is a legitimate government interest in stopping alcohol abuse but that does not translate into imposing penalties on everyone who drinks. That’s basically an irrebuttable presumption of guilt.

    Comment by John Bambenek Friday, Nov 14, 08 @ 12:45 pm

  14. If you could guarantee the extra revenue was going into alcoholism-fighting programs, maybe. We saw how the tobacco money thing worked out though. The other issue I see is, the addicts and abusers won’t stop buying - b y definition, they can’t. So you’re going to see more crime happen, or, if they are still law-abiding, they are going to short their families on the costs elsewhere to make up the extra cash. Some kid will go with even less nutrition or other essential needs being met, because the household budget is going into mom or dad’s liver.
    This kind of math problem is more complex than simple yes or no answers.

    Comment by Gregor Friday, Nov 14, 08 @ 12:50 pm

  15. I would argue that it is a pretty bad idea to draw conclusion from a study that only involved a single state. It could cause an incorrect estimate of what the affect of an increase in the alcohol has the drinking rate because there could be difference in state specific factors that could alter the effectiveness of an alcohol tax. For examples most studies of cigarette consumptions have shown that demand is relatively inelastic ie a 1 percent increase in the tax rate leads to a less than 1 percent decline in cigarette use but they also show that effect can vary quite a bit depending on the state. I suspect that you could have the same thing with the relationship between alcohol consumption and taxes that it could vary depending on the state
    Second the article does not mention what the initial tax level was you could have a very large difference if your talking a tax rate that moved from a very level to start with to a higher level there could be difference if you dealing with state that already has an alcohol tax that a relatively higher level than Alaska did at first.
    With out reading the study it hard to real draw any conclusion and I would be reluctant to draw any from a study that used only a single state.

    Comment by RMW Stanford Friday, Nov 14, 08 @ 12:53 pm

  16. Did other things, such as crime go up when taxes went up? SIlly study. Maybe if taxes went up, drinking went down, people would stop voting while intoxicated and we wopuldn’ be in the mess we are in.

    Comment by Wumpus Friday, Nov 14, 08 @ 12:57 pm

  17. The eternal answer of the big government types, raise taxes.

    Any or no reason will do.

    Comment by Cal Skinner Friday, Nov 14, 08 @ 1:09 pm

  18. The DOC makes a good point raising the level of the alcohol tax in Illinois would certainly lead to an increase in people from Illinois buying alcohol in order states and it would definitely be a far more common occurrence than in Alaska. There are so many state and regional specific characteristics that affect alcohol consumption that it is a bad idea to make public policy decision off a study of a single state.

    Comment by RMW Stanford Friday, Nov 14, 08 @ 1:12 pm

  19. We all know that the beer distributors have way too much money to let this happen.

    Comment by College Student Friday, Nov 14, 08 @ 1:13 pm

  20. Perhaps if we tax food more, obesity and it’s associated health issues would decline. Or let’s tax automobiles more and watch car accidents decline. Some people can take the most innocuous, useful, innocent thing and misuse them. Social engineering won’t work. Tax booze for revenue if you must, but don’t drape it in “Public Health Issue” clothing!

    Comment by TimB Friday, Nov 14, 08 @ 1:14 pm

  21. Time to clean up the still

    Comment by curious george Friday, Nov 14, 08 @ 1:20 pm

  22. I think that it should be raised. Every time the state wants to raise money, they raise the cigerette tax. Why not raise the alcohol tax? Why is it ok to tax the crap out of the cigerette smokers and not the drinkers?

    Comment by Miranda Friday, Nov 14, 08 @ 1:21 pm

  23. Tax it. If it raises some revenue, great. Use it for grants for education–allocations based on revenues so no one comes to depend on a particular amount each year. No revenue, no grants.

    If it saves a life or two in the process it’s not social engineering it’s just good fortune. Any port in a storm, Cal.

    Comment by Taxabilly Friday, Nov 14, 08 @ 1:23 pm

  24. Miranda,

    One of the things that makes cigarette taxes so popular with politicians is that one it doesn’t raise much of stir from most of the public. A large portion of the public has a negative view of cigarettes so they are unlikely to complain about the increase in the tax rate and the tax increase affects a relatively small percentage of the population.
    The second reason is that cigarettes have historical had a very inelastic demand, though a few recent studies indicate that might be changing, so if you raise taxes on cigarettes consumption falls by less than the percentage tax increases, ie a 2 percent in the tax rate might decline cigarette purchase by 0.5%. So politicians know that more likely than not it will increase tax revenue and that they dont have to worry about the tax increase leading to lower levels by decreasing consumption like what might happen with other goods or services.

    Comment by RMW Stanford Friday, Nov 14, 08 @ 1:33 pm

  25. This will be a direct hit on the restaurant business which is already reeling in today’s economy (except fast food joints which are doing OK on their dollar menus). Joe Sixpack will also not be happy. It wouldn’t cause much disruption or change in my life (I can afford what alcohol I drink, and don’t drink a lot). It might also make my oldest son unhappy, who likes to drink beer with his limited discretionary income.

    Comment by Six Degrees of Separation Friday, Nov 14, 08 @ 1:40 pm

  26. I have the answer. Lets bailout the alcohol and cigerette companies because if we tax them anymore they are going to lose money and the big shots won’t get there big retirement money. The Government should be giving the bailout money to the people not to these big companies.

    Comment by Boscobud Friday, Nov 14, 08 @ 1:40 pm

  27. wow, what’s wrong with social engineering? I see nothing wrong with raising all sin taxes, such as gaming, liquor, smokes, fois gras…a tax with a dual purpose (1, raise revenue and 2, decrease negative behavior) is a great idea.

    By the way, what the heck do we think a speeding ticket does? Raises revenue and dang sure changes behavior…

    Comment by Mongo Friday, Nov 14, 08 @ 1:41 pm

  28. Think I’ll crack open a cold one, do some Friday beer blogging and ponder this one.

    Comment by Oh my Bama Friday, Nov 14, 08 @ 2:07 pm

  29. Higher taxes are probably one cause for people drinking the in first place, as are the other stresses of having less control of your income, or just having less income. More taxes on alcohol will probably raise more money, but it’s goofy to think they are going to reduce “drinking problems.” Drinking alcohol is a cultural behavior as much as a personal one.

    Comment by Captain Flume Friday, Nov 14, 08 @ 2:12 pm

  30. Raising taxes will not stop drinking; drinkers will just buy cheaper booze…or just start robbing other people to buy it just as illegal drug users do.

    Comment by Chanson Friday, Nov 14, 08 @ 2:14 pm

  31. Great. The state is already dependant upon tax revenue from gambling and smoking. Lets up the dependance on booze, too.

    Comment by Downstate weed chewing hick Friday, Nov 14, 08 @ 2:24 pm

  32. Absolutely!
    Life is too short to drink cheap booze!

    Comment by VanillaMan Friday, Nov 14, 08 @ 2:34 pm

  33. To quote Barack Obama, we need to use a scalpel, not an axe.

    Comment by Yellow Dog Democrat Friday, Nov 14, 08 @ 2:42 pm

  34. And let’s legalize pot so we can tax that. Oh, wait, I accidentally gave a good idea….

    Comment by Excessively rabid Friday, Nov 14, 08 @ 2:49 pm

  35. For all of those answering no, what proposals do you have for decreasing drinking-related deaths and illnesses? How will you fund them?

    This isn’t an imposition of Big Government. There will be no excessive drinking watchdog. All it does is hopefully persuade some people to drink a couple fewer. Sure, will some people drive over to Indiana for booze just as they do for cigarettes? Sure. But they do that already. And I don’t know about you, but I still see a lot of stores carrying tobacco products in Chicago.

    No one likes paying more. But I’m certainly willing to give even Rod a few bucks to waste at his discretion if it keeps a few people from dying a truly painful, horrible death.

    Finally,

    ====”More taxes on alcohol will probably raise more money, but it’s goofy to think they are going to reduce “drinking problems.” Drinking alcohol is a cultural behavior as much as a personal one.” ===

    CF, that’s what people said about cigarette taxes. Yet look at smoking rates for the past 15 years.

    Comment by South Side Mike Friday, Nov 14, 08 @ 2:58 pm

  36. Personally I’m not in favor of it. But thanks for asking! There are 4 other studies that say the exact opposite.

    Comment by Beerman Friday, Nov 14, 08 @ 2:59 pm

  37. Sure, tax the BGBs out of it - My trips to Missouri for tobacco will just be more efficient as I’ll get the booze at the same time.

    Comment by A Citizen Friday, Nov 14, 08 @ 3:06 pm

  38. The markets are crashing down upon us, layoffs as raging and some goofball wants to talk about raising taxes? Oi. We alreadyexcessivly tax alcohol by the goofy Wirtz act. This simply funnels the public’s money into private hands.

    Delete the Wirtz Act and move the revenue into the State budget.

    Disintermediation is not just a game from Mattel

    Comment by Plutocrat03 Friday, Nov 14, 08 @ 3:06 pm

  39. Plutocrat03 -

    The Wine and Spirits Fair Dealing Act (Aka the “Wirtz Law”) was repealed in 2000.

    Comment by Beerman Friday, Nov 14, 08 @ 3:11 pm

  40. To South Side Mike,

    There is very little evidence that increasing taxes on cigarettes leads to large decrease in the amount of smoking. Most of the studies show that an increase in taxes on cigarettes leads to relatively small fall in cigarette consumption. Increases in cigarette taxes are a relatively minor reason for the decrease in smoking rates, the main causes for the decrease in smoking rates has been due to better education and to a lesser degree decreases in tobacco advertisement.
    The people that have the worse drinking problems probably also have the most inelastic demand for alcohol and are also the ones that are the least likely to decrease their drinking because of higher taxes.

    Comment by RMW Stanford Friday, Nov 14, 08 @ 3:16 pm

  41. RMW,

    I agree that anti-tobacco messages have gotten stronger over the past decade. But I would not discount the price factor, especially for youth. When I was in high school (graduated in 1997), a pack of Marlboros with tax was $1.81 (I grew up in Georgia). A pack per day habit set my friends back $15 each week. Now that same pack per day would cost $35. You don’t think that extra $20/week dissuades teens more than a TV ad?

    Demand for cigarettes among smokers is relatively inelastic. Demand for cigarettes among pre-smokers is very elastic.

    Higher alcohol taxes might not stop many current drinkers from partaking. But it might limit how many teens start drinking habitually.

    Comment by South Side Mike Friday, Nov 14, 08 @ 3:37 pm

  42. I’m for a tax, because…oh look, Bill’s running for the Senate!

    Comment by Ahem Friday, Nov 14, 08 @ 3:53 pm

  43. I would agree that has some affect on the amount people that who choose to start smoking but I think that relative to other factors it is relative lower. Better educations and the spread of knowledge about tobacco along with the changing social attitudes towards smoking have a had the largest effect.
    With drinking I suspect that you might even have a less of an affect.
    I believe that social attitudes and other factors have a far large role in drinking, smoking and the use of other addictive items.
    I would certainly be very reluctant to use a study of single state, that is a relatively unique state, as part of an argument for a change in public policy. Particularly with out seeing the details of the study. Depending on the relative tax levels we are talking about in Alaska at the start and the end of the study versus what they are in Illinois and any proposed tax increase you level could get a different set of results. That along with other state specific factors and differences.

    Comment by RMW Stanford Friday, Nov 14, 08 @ 4:05 pm

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