The case for raising the alcohol tax, in one paragraph
by German Lopez
July 31, 2015
America has an alcohol problem – and some public health experts say the country is very much in need of an intervention. In the US, alcohol abuse causes 88,000 deaths each year, is linked to 40 percent of violent crimes, and led to more than 4.6 million emergency room visits in 2010.
But what should that intervention look like? A new review of the research from David Roodman, senior adviser for the Open Philanthropy Project, makes a case for a higher alcohol tax. Roodman summarized his findings in one paragraph:
The literature on this topic is large, and at first glance it seemed that the high-quality studies contradicted each other. Yet as I dug deeper, I found a pattern: the larger the experiment – the larger the price change – the clearer the effects. In the end, I believe the preponderance of the evidence says that higher prices do correlate with less drinking and lower incidence of problems such as cirrhosis deaths. And I see little reason to doubt the obvious explanation: higher prices cause less drinking. A rough rule of thumb is that each 1% increase in alcohol price reduces drinking by 0.5%. Extrapolating from some of the most powerful studies, I estimate an even larger impact on the death rate from alcohol-caused diseases: 1-3% within months. By extension, a 10% price increase would cut the death rate 9-25%. For the US in 2010, this represents 2,000-6,000 averted deaths/year.
This isn’t the first argument or positive research finding in favor of raising the alcohol tax, but it’s one of the most convincing. Roodman found not just that high-quality research supports a higher alcohol tax, but that the effects seem to grow stronger the higher the tax is.
So for the US, 10 percent higher alcohol prices could save as many as 6,000 lives each year. To put that in context, it would mean paying about 50 cents more for a six-pack of Bud Light, and probably save thousands of lives in the process.
And this is a conservative estimate: It only counts alcohol-related liver cirrhosis deaths. The number of saved lives would be higher if it accounted for deaths due to alcohol-related violence and car crashes.
Higher taxes aren’t the only proposal to help deal with America’s alcohol problem. An April 2014 report from the RAND Drug Policy Research Center suggested that state governments could monopolize sales of alcohol through state-run shops, finding that states that did this kept prices higher, reduced access to youth, and reduced overall levels of use. And a 2013 study from RAND found South Dakota’s 24/7 Sobriety Program, which jails people whose drinking has repeatedly gotten them in trouble with the law if they fail a twice-a-day alcohol blood test, attributed a 12 percent reduction in repeat DUI arrests and a 9 percent reduction in domestic violence arrests at the county level to the program.
But to get any consideration for these types of proposals, policymakers and the public need to acknowledge that America does have an alcohol problem, which makes studies like Roodman’s all the more important to exposing the issue.