We know that under age drinking is a serious problem. Let’s look at the three policy options for reduction of underage drinking in this two part article:

How do we prevent alcohol abuse and prevent increased under-age drinking? Numerous theories have been proposed, explored and studied. Three of the policy options proven to be the most effective for reduction in the consumption of alcohol consumption are an increase in the tax on alcohol sales, DUI countermeasures and restrictions on access to alcohol.

1. Increase Alcohol Tax
Increased alcohol taxation and/or increased alcohol pricing is a proven means for reduction in the total consumption of alcohol. Babor et al. (2003). Higher tax rates on alcohol and higher alcohol prices lead to reductions in alcohol consumption among youth, thus reducing traffic fatalities, some crimes and less adult alcoholism. Studies have shown that beverage alcohol prices and taxes are related inversely to drinking. In a study released in 2008, “Effects of beverages and alcohol price and tax levels on drinking: a meta-analysis of 1003 estimates from 112 studies”, the authors examines 112 previous studies dating back to 1970, to determine the effect of alcohol price and tax increases on alcohol consumption. Their conclusion is that there is a verifiable, significant decrease in alcohol consumption commensurate with price or tax increases. They further report that, given the low cost of a tax increase, the substantial benefit derived from such a price increase and the social cost of alcohol, a price or tax increase is worth investigating.

The National Academy of Sciences recently recommended increasing alcohol taxes, especially on beer, in order to decrease teenage drinking. The U.S. Surgeon General, in March 2007, in a “Call to Action on Underage Drinking” called for a tax increase on alcohol or any other measure that would work, in order to reduce teenage drinking. A 2005 petition to Congress from 60 of America’s leading economists, including 4 Nobel Prize winners, agreed that an alcohol tax increase is due and justified.
The tax on alcohol has been raised once in the last 50 years and has not kept pace with inflation. The potential revenues associated with the increased tax are staggering and this combined with the verified reduction in the consumption of alcohol makes an increase in alcohol taxes a necessity.

    Public Support

In a 2001 national poll conducted by Center for Science in the Public Interest, an NGO (non-governmental organization) committed to public alcohol education and legislative action and Mothers Against Drunk Driving, 71 percent of Americans supported an increase in the tax on beer if the money were to be used for substance abuse prevention. In the same poll, 75 percent of Americans believe that a tax reduction would benefit only the alcohol industry more than consumers and 77 percent of drinkers agreed. The American public is aware of the dangers of alcohol abuse and the cost to society caused by alcoholism. A small increase in the tax on alcohol will raise billions of dollars in revenue which can be used to address necessary health care, some of which arose from alcohol abuse.

    Alcohol Industry Opposition

The alcohol industry will strongly oppose any efforts to raise the price of alcohol. There is no secret that the alcohol industry has a huge stake in not allowing tax increases on alcohol. The alcohol tax was last raised in 1991 and the alcohol industry learned that consumers drink less as alcohol prices increase. They cite to loss of revenues, loss of jobs and the financial impact the tax increase has upon their industry, and ostensibly, upon society through loss of employment, as reasons to oppose an increase. The alcohol industry has their own trade or interest groups; The Beer Institute, The Wine Institute and the Distilled Spirits Council of the United States. Each of these groups has addressed a potential tax increase on their respective websites, but the most prominent opponent, at this time, to a tax increase is the Beer Institute. The Beer Institute recently launched The Legislative Action Network to mobilize support across the country where brewers, importers and industry suppliers have a presence. The goal is “to fight unfair and excessive taxation that threatens tens of thousands of men and women in the beer industry”.

Clearly the alcohol industry and all associated businesses (suppliers and restaurants) will fight any efforts to raise tax on alcohol, but as the Beer Institute states, it is inevitable that the tax will be raised in the near future. The alcohol industry is quietly preparing for a fight. They know an increase in the tax rate is coming. It is just a matter of how much of an increase is imposed.

To read part two of the article click here.

For more information on Hawaii Island Recovery and how we can help you or a loved one with alcohol, substance or any other addiction please call us at 1-866-515-5032 or contact us online via our secured form.

Filed under: Society

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