Showing posts with label tax. Show all posts
Showing posts with label tax. Show all posts

Saturday, March 9, 2024

America Is Still Drowning In The Bottle

Americans are still drowning in the bottle to this day, and paying a heavy price for it.  While the pandemic and especially the lockdowns were clearly gasoline on the fire, that fire has been burning for a very long time before that.  The ageist abomination that is 21 drinking age, and all of its illiberal ancillary laws, has clearly done NOTHING to stem that tide in the long run.  And it's truly no coincidence that alcohol (of all types, but especially hard liquor) is now the cheapest it has been in many, many decades relative to inflation and (especially) income.  That's largely because alcohol taxes have greatly lagged behind and were thus eroded by inflation in recent decades, with the tax on distilled spirits lagging the very most of all.

To quote the latest CDC report on the matter:

Average annual number of deaths from excessive alcohol use, including partially and fully alcohol-attributable conditions, increased approximately 29% from 137,927 during 2016–2017 to 178,307 during 2020–2021, and age-standardized death rates increased from approximately 38 to 48 per 100,000 population. During this time, deaths from excessive drinking among males increased approximately 27%, from 94,362 per year to 119,606, and among females increased approximately 35%, from 43,565 per year to 58,701.

Thus, as Twenty-One Debunked has long advocated, we need to raise the alcohol taxes across the board, and harmonize them all based on alcohol content.  To raise just the beer tax alone, for example, would result in drinkers simply switching to liquor, similar to how minimum unit pricing in Scotland disproportionately affected strong cider and perversely incentivized switching to liquor.  MADD (Mothers Against Drunk Driving) has long heavily beaten the drum (though not so much recently) for raising the beer tax, but has also largely been strangely silent on the distilled spirits tax.  Perhaps some alleged palm-greasing from both the liquor industry and/or foreign beer industry may be at work here?  Things that (should) make you go, hmmmm.....

We advocate raising all federal alcohol taxes to about $30 per proof-gallon, equal to the inflation-adjusted value for the distilled spirits tax in 1991 (in 2023 dollars), the last time it was raised. That would add anywhere between one and two dollars (depending on alcohol content), to the price of a six-pack of beer, a gallon of wine, or a fifth of liquor, while also incentivizing reduced-alcohol beers and wines.  And while that may not be very much of a difference to a moderate drinker, for heavy drinkers it sure adds up, as it also does for the youngest drinkers as well.  And contrary to what some believe, the price elasticity of demand for alcohol is NOT zero or trivial, and the public health benefits of higher alcohol taxes and prices are well-known and established.

To sweeten the deal, we support a relatively reduced tax rate for the smallest producers, and we also support tax incentives for producers who fortify their beverages with thiamine (vitamin B1) and perhaps other vitamins as well.  And we would also support phasing in alcohol tax hikes a bit more gradually if that is the only way to get them passed.  But raise these taxes, we certainly must.

(And, of course, we also also lower the drinking age to 18 yesterday, full stop.  We are still Twenty-One Debunked, after all.)

It is true that Thomas Jefferson once famously said, "no nation is drunken where wine is cheap".  Granted.  But the second half of that very same quote was, "and none sober when the dearness [expensiveness] of wine substitutes ardent [distilled] spirits as the common beverage.  It is, in truth, the only antidote to the bane of whiskey."  And now in 2024, it would seem that ALL categories of alcoholic beverages are too cheap for America's own good, and a fortiori for ardent (distilled) spirits today.

Saturday, January 27, 2024

America Is Still Drowning In The Bottle

Americans are still drowning in the bottle to this day.  While the pandemic and especially the lockdowns were gasoline on the fire, that fire has been burning for a very long time before that.  The ageist abomination that is 21 drinking age, and all of its illiberal ancillary laws, has clearly done NOTHING to stem that tide in the long run.  And it's truly no coincidence that alcohol (of all types, but especially hard liquor) is now the cheapest it has been in many, many decades relative to inflation and (especially) income.  That's largely because alcohol taxes have greatly lagged behind and were thus eroded by inflation in recent decades, with the tax on distilled spirits lagging the most of all.

Thus, as Twenty-One Debunked has long advocated, we need to raise the alcohol taxes across the board, and harmonize them all based on alcohol content.  To raise just the beer tax alone, for example, would result in drinkers simply switching to liquor, similar to how minimum unit pricing in Scotland disproportionately affected strong cider and perversely incentivized switching to liquor.  MADD has long heavily beaten the drum (though not so much recently) for raising the beer tax, but has also largely been strangely silent on the distilled spirits tax.  Perhaps some alleged palm-greasing from both the liquor industry and/or foreign beer industry may be at work here?  Things that (should) make you go, hmmmm.....

We advocate raising all federal alcohol taxes to about $30 per proof-gallon, equal to the inflation-adjusted value for the distilled spirits tax in 1991, the last time it was raised. That would add anywhere between one and two dollars (depending on alcohol content), to the price of a six-pack of beer, a gallon of wine, or a fifth of liquor, while also incentivizing reduced-alcohol beers and wines.  And while that may not be very much of a difference to a moderate drinker, for heavy drinkers it sure adds up, as it also does for the youngest drinkers as well.  And contrary to what some believe, the price elasticity of demand for alcohol is NOT zero or trivial, and the public health benefits of higher alcohol taxes and prices are well-known and established.

To sweeten the deal, we support a relatively reduced tax rate for the smallest producers, and we also support tax incentives for producers who fortify their beverages with thiamine (vitamin B1) and perhaps other vitamins as well.  And we would also support phasing in alcohol tax hikes a bit more gradually if that is the only way to get them passed.  But raise these taxes, we must.

(And, of course, we also also lower the drinking age to 18 yesterday, full stop.  We are still Twenty-One Debunked, after all.)

It is true that Thomas Jefferson once famously said, "no nation is drunken where wine is cheap".  Granted.  But the second half of that very same quote was, "and none sober when the dearness [expensiveness] of wine substitutes ardent [distilled] spirits as the common beverage.  It is, in truth, the only antidote to the bane of whiskey."  And now in 2024, it would seem that ALL categories of alcoholic beverages are too cheap for America's own good, and a fortiori for ardent (distilled) spirits today.

Tuesday, May 31, 2022

Do Tobacco 21 Laws Really Work?

A recent study claims that Tobacco 21 laws work to reduce teen tobacco use.  But upon closer examination, there is less here than meets the eye.  While this new nationwide study controlled for a host of other variables and spanned from 2012-2019, it still leaves the reader with more questions than answers.  

For example, the supposed effect in survey data in grades 8, 10, and 12 was statistically significant for combustible cigarettes, particularly for grade 12, but NOT for vape products at any grade level, while for the Nielsen sales data the apparent effect was much larger for vape products than combustible cigarettes.  How exactly can this glaring contradiction be explained away?  Also, no significant effect was observed on heavy smoking, which intuitively should have had the largest effect size of all due to heavy smokers facing the greatest "hassle costs" when cigarettes become even somewhat more difficult to obtain.  And even for cigarette smoking in general, the absolute difference-in-differences was a few percentage points at most, for a substance whose popularity and prevalence was already declining among all ages long before the age limit was hiked to 21 (in contrast to vaping, which increased dramatically among young people during this period).

Furthermore, the study did not look beyond the first two years post-enactment of such laws, so any observed effects may very well be merely short-term effects (cf. Miron and Tetelbaum 2009 for the 21 drinking age and alcohol-related traffic fatalities).

Interestingly, the study authors do concede that at least some of the observed effect on people under 18 is a result of increased ID checking and increased perception of risk of of tobacco products.  Of course, we know that it is not really necessary to raise the age limit higher than 18 to achieve such effects.

Overall, this nationwide Tobacco 21 study (the second of its kind) was rather less impressive that an earlier nationwide study by different authors, for reasons that are not entirely clear.  But it is very likely a repeat of what we like to call "The Incredible Shrinking Effect Size", a phenomenon that we have seen before with studies of the 21 drinking age over time.  Which means that it was most likely a statistical mirage all along, at least in the long run.

Regardless of what sort of effects, or lack thereof, that Tobacco 21 laws supposedly had, we at Twenty-One Debunked nonetheless oppose such laws on principle 100%, just like we oppose the 21 drinking age and toking age as well.  Let America be America Again!

UPDATE:  A recent pro-21 article made a Freudian slip about what happened since Texas raised their smoking age to 21 in 2019:

"Since then, the use of tobacco by teens decreased from 21.8% in 2019 to 19.1% in 2021, according to the CDC and the American Lung Association."

That is NOT a particularly large difference in teen tobacco use (which includes both smoking and vaping), especially since teen vaping had already peaked by 2019 and teen smoking had already been plummeting for decades.  Technically, the latter data were from the 2020 Texas School Survey, not 2021, and the 2019 data were from the CDC YRBS, as each survey is done only every other year.  But either way, the point still stands.  In fact, when compared to the 2018 TSS data, the 2020 TSS data are almost identical.

2023 UPDATE:  The study in question has been recently revised, but not in a way that materially alters any of the above conclusions or criticisms.  In fact, reading between the lines, not only does the results look even less consistent and statistically significant than before, but now the effect size on survey results seems to be much larger for vaping than for smoking at all grade levels, implying that some vapers have likely switched to smoking.  That makes the Tobacco 21 policy a net public health loser.

2024 UPDATE:  A 2021 study of California, one of the first two states to implement a statewide Tobacco 21 law in 2016, showed weak and unimpressive numbers in a difference-in-differences analysis.  Womp womp.

Wednesday, March 27, 2019

What's The Best Way To Reduce Teen Vaping? Teens Already Know The Answer

As bewildered chronological adults wring their hands and scratch their heads on how to best fight the teen vaping "epidemic", a recent article came out in Utah that actually asked teens themselves how to do it.  The answer was simple:  tax the hell out of it to make it more expensive.  Gee, who woulda thunk it?

Notice they did not say anything about raising the age limit, by the way.   America's experience with combustible cigarettes has shown that raising the price, via taxes or otherwise, seems to be the most effective and cost-effective way to do it.  And while it works for all ages, the effect size is larger for young people since they are more price-sensitive overall.

Of course, if vape taxes are raised, care must be taken to also raise combustible tobacco taxes so as not to inadvertently steer young people back to smoking.   And as long as vaping remains an available alternative, cigarette taxes can go much higher than they are now (except New York) without creating too much of a black market.   Thus vape taxes should go up, and cigarette taxes should be even higher still.  And only nicotine-containing vape juices and pods should be taxed significantly, ideally proportional to nicotine content.  (Hardware devices themselves should only be taxed modestly, if at all.)

Other effective measures we have noted include capping and reducing the nicotine content of vape products down to European and Israeli levels (JUUL, we're looking at YOU), strictly enforcing the 18 age limit on vendors for all tobacco and nicotine products, and perhaps also removing kid-friendly fruity flavors of nicotine-containing vapes from the market.  But raising the age limit any higher than 18 should quite frankly not even be considered.   Too bad Utah is now the latest state to NOT heed that last bit of advice.