Study: Taxes on Alcohol Could Reduce Drunk Driving Accidents

Source: US News

By Kimberly Leonard

April 6, 2015

Raising taxes on alcohol is associated with reducing drunk driving accidents, a new study suggests.

Researchers at the University of Florida in Gainesville published findings online Monday in the American Journal of Public Health examining the result of 2009 tax increases on alcohol in Illinois.

The state boosted its excise tax on beer by 4.6 cents a gallon, on wine by 66 cents a gallon and on distilled spirits by $4.05 a gallon, or by 1 cent more that consumers pay per glass of beer or wine and nearly 5 cents more for a serving of spirits.

Researchers say the results indicated that alcohol-related traffic deaths fell 26 percent overall, with a decrease even higher among young people, at 37 percent. Fatal crashes involving alcohol-impaired and extremely drunk drivers fell 22 percent and 25 percent, respectively.

“Similar alcohol tax increases implemented across the country could prevent thousands of deaths from car crashes each year,” Alexander Wagenaar, a professor in the department of health outcomes and policy at the University of Florida, said in a statement.

But Illinois alcohol-related traffic fatalities were on a downward trend before the tax increase, says David Ozgo, senior vice president for economic and strategic analysis for the Distilled Spirits Council of the United States, which represents the industry.

“In fact, the largest annual decline over the last eight years occurred in 2008, the year before the tax rate changed,” he said. “Importantly, Illinois alcohol-related traffic fatalities declined faster than the national average before the tax increase and this has not been the case since the tax increase.”

Drunk driving deaths have declined 52 percent during the past two decades from 21,113 in 1982 to 10,076 in 2013, he said.

Authors of the study noted that alcohol has become much less expensive in recent decades due to decreases in alcohol tax rates. Having more than 10 drinks a day would have cost the average person about half of his or her disposable income in 1950, for instance, compared with only 3 percent of disposable income in 2011, they wrote.

“While our study confirms what dozens of earlier studies have found – that an increase in alcohol taxes reduces drinking and reduces alcohol-related health problems, what is unique is that we identified that alcohol taxes do in fact impact the whole range of drinking drivers, including extremely drunk drivers,” Wagenaar said.

“This goes against the conventional wisdom of many economists, who assert that heavy drinkers are less responsive to tax changes, and has powerful implications for how we can keep our communities safer,” he added.

Ozgo disputed the findings. “Repeated studies, including research by the National Institute on Alcohol Abuse and Alcoholism, have shown that alcohol abusers are not deterred by higher prices,” he said. “It is the moderate, responsible consumers who are most sensitive to prices and are the ones that cut back the most when prices increase.”