While the opioid epidemic has recently been declared a public health emergency, what if we were to tell you that there is another drug epidemic that
kills even more people (a whopping 88,000 per year vs. 65,000 per year for opioid and all other drug overdoses combined), a number that has actually been
increasing in recent years? And that number, though staggering in itself, is merely the tip of a very large iceberg of injury, illness, crime, violence, motor vehicle crashes, family breakdown, addiction, and other social costs linked to this deadly yet ubiquitous substance. Meanwhile, the powers that be are responding to this epidemic with a collective shrug for the most part. I think the reader would figure out by now that we are talking about
alcohol.
And aside from its overall banality, what is particularly notable about the alcohol epidemic is how ageist our response has been. While the epidemic clearly affects all ages, the powers that be have been focusing in laser-like fashion on people under 21 while largely ignoring people over 21, despite the fact that people over 21 make up the vast majority of this epidemic. Not only does this scapegoat young people for largely adult problems, but it also hinders any real solutions to such problems as well. It's basically the "pink elephant in the room".
So what should the ideal alcohol tax be? According to researchers, the
externality costs of alcohol are estimated to be around $45-58 per proof-gallon, yet the federal tax on distilled spirits is $13.50 per proof-gallon, and for wine and beer it varies but tends to hover between $4 and $5 per proof-gallon. And while state and local alcohol taxes vary, they are also generally very modest in most states, especially for beer. So there is a very wide range by which such taxes can be raised while still being socially efficient.
Of course, those figures are now effectively even lower now that the Republican tax bill has
lowered such rates even further for roughly the first 100,000 proof-gallons of all alcoholic beverage categories across the board. But the aforementioned rates still remain the top rates above the respective thresholds in the now-tiered system. Beer was always tiered with a reduced rate for the first 60,000 barrels, but now that reduced rate is even lower still, and for the first time ever distilled spirits now enjoy a reduced rate for the first 100,000 proof-gallons. The
rate structure is not inherently bad in itself, of course, but both the new and old rates are
simply too low.
Twenty-One Debunked believes that, along with lowering the drinking age to 18, that alcohol taxes should be raised significantly. Specifically, we support raising and equalizing the federal tax on all alcoholic beverages to the inflation-adjusted 1991 level for distilled spirits, which would be $24 per proof-gallon in 2016 dollars. It should also be simplified by getting rid of all credits and lower tax rates, with perhaps the exception of ones for the first X number of proof-gallons produced by very small domestic producers. At the state level, it would also be good to equalize alcohol taxes across all beverage typ
es, while allowing localities to levy their own alcohol taxes (including sales and gross excise taxes) as they see fit. The latter is especially important for college towns.
Even a smaller hike, such as to $16 per proof-gallon across the board, would likely
save thousands of lives per year according to researchers. And of course it would also raise more revenue. As for job losses, the best research suggests that the net effect is actually neutral or even positive with respect to jobs overall. So it should be a no-brainer. A win-win-win situation for everyone but the alcohol industry, basically.
Oh, and by the way: craft breweries (both macro and micro) not only exist in high-tax Canada, but actually appear to be
thriving over there. Ditto for even
higher-tax Iceland as well. Keep in mind that the tax hikes we propose would still leave American beverages
cheaper than Canadian beverages. So even if we raise such taxes dramatically without reduced rates or credits for small producers, they will likely continue to thrive here as well (at least if such tax hikes are phased in somewhat gradually).
Don't get us wrong, Twenty-One Debunked does not believe that alcohol is inherently evil or anything like that. We are certainly not in league with the neo-dry lobby! But when we as a society fail to appreciate that alcohol has a very real dark side for all ages, there are very serious consequences to doing so. History speaks for itself. So what are we waiting for?