David Leonhart argues in the Times
that alcohol taxes have, in effect, been dropping, and that the principal benefits of alcohol taxes – reductions in use (and the consequent harms), and offsetting the costs of alcohol use. From “Let’s Raise a Glass to Fairness,
” published on December 26th:
Since the early 1990s, the federal tax on wine — $1.07 a gallon — hasn’t budged. The taxes on beer and liquor haven’t changed either, which means that, in inflation-adjusted terms, alcohol taxes have been steadily falling. Each of the three taxes is now effectively 33 percent lower than it was in 1992. Since 1970, the federal beer tax has plummeted 63 percent. Many states taxes have also been falling. At first blush, this sounds like good news: who likes to pay taxes, right? But taxes serve a purpose beyond merely raising general government revenue.
| Jonathan Gruber: “taxes are way too low on alcohol” ff |
Taxes on a given activity are also supposed to pay the costs that activity imposes on society. And for all that is wonderful about wine, beer and liquor, they clearly bring some heavy costs. Right now, the patchwork of alcohol taxes isn’t coming close to covering those costs — the costs of drunken-driving checkpoints, of hospital bills for alcohol-related accidents and child abuse, and of the economic loss caused by death and injury. Last year, some 17,000 Americans, or almost 50 a day, died in alcohol-related car accidents. An additional 65,000 people a year die from other accidents, assaults or illnesses in which alcohol plays a major role. Mr. Cook, besides being a wine lover, has been thinking about the costs and benefits of alcohol for much of his career, and he has come up with a blunt way of describing the problem. “Do you think we should be subsidizing alcohol?” he asks. “Because that’s what we’re doing.”
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