The Composition and Magnitude of Alcohol Taxes in States: Do They Cover Alcohol-Related Costs?

The Composition and Magnitude of Alcohol Taxes in States: Do They Cover Alcohol-Related Costs?

Blanchette, Jason G;Chaloupka, Frank J;Naimi, Timothy S;
Journal of studies on alcohol and drugs 2019 Vol. 80 pp. 408-414
270
blanchette2019thejournal

Abstract

At least one type of tax is applied to the sale of alcoholic beverages in all U.S. states. The purpose of this study was to characterize the composition and magnitude of alcohol taxes in states and to assess the relationship between total alcohol taxes (federal plus state) and the cost of excessive drinking.The amount of tax (in dollars per standard drink) by state was estimated from data on state ad valorem excise, specific excise, and sales taxes in 2010 obtained from the Alcohol Policy Information System and Tax Foundation. These taxes were summed, and specific excise taxes were assessed as a proportion of total state taxes. Tax data on beer were analyzed for all 50 states. Tax data for wine and distilled spirits were restricted to the 32 license states and Washington, D.C., with fully privatized distribution systems. Total alcohol taxes for the 32 license states were compared on a per-drink basis with published state estimates of the cost of excessive drinking in these states in 2010.Specific excise taxes accounted for a weighted median of 20.1% of total state alcohol tax revenue in the 32 license states and Washington, D.C. The median total alcohol tax per drink (based on all federal and state taxes) was $0.21, which accounted for 26.7% of the median cost to government and 10.3% of the median total economic cost of excessive drinking.Specific excise taxes account for one fifth of state alcohol taxes in the 32 license states; but even considering all tax types, total alcohol taxes account for only one tenth of alcohol-related costs.

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