Higher tax good for what ails us?

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Public health advocates say state and federal lawmakers have the power to instantly reduce drunken driving and other ills flowing from excessive alcohol consumption: the power to tax.

National public health experts for years have been calling on elected officials to boost taxes — and thus the price — for alcohol, saying the strategy has been proven in numerous studies to reduce alcohol consumption and related harms.

Now a fraction of what they were decades ago, excise taxes on alcohol in the United States have fallen off dramatically. Adjusted for inflation, the federal excise tax on a six-pack of beer since 1950 has dropped from $1.33 to 33 cents.

State taxes also have been on the decline. Nebraska's inflation-adjusted excise tax on a six-pack has dropped from 32 cents to 17 cents since 1970, while Iowa's tax of 11 cents is half what it was 25 years ago.

“It's a simple intervention that has a significant and amazingly consistent effect,'' said Alexander Wagenaar, a University of Florida epidemiologist. “Simply adjusting decades-old tax rates to account for inflation would save thousands of lives and billions of dollars.''

But such calls face strong opposition not only from Joe Sixpack but also from the alcohol industry, restaurants and bars. They say alcohol taxes are regressive, hurt legitimate businesses and kill jobs.

Laurie Wolford, owner of Spirit World in Omaha, said she doesn't believe her business or customers are undertaxed. She also is skeptical that a tax would reduce alcohol's ill effects, saying problem drinkers instead would just turn to cheaper alcohol.

“People who drink don't stop drinking,'' she said.

The numerous scientific studies touting the impact of alcohol taxes have produced little momentum for change in Washington or in most state capitals, despite the often huge deficits federal and state governments face today.

Federal alcohol taxes were last increased two decades ago. When the Obama administration looked to fund increased children's health care coverage in 2009, it more than doubled federal excise taxes on cigarettes, but it didn't touch alcohol taxes.

While a rash of high-profile drunken driving cases have Nebraska state senators examining a dozen different approaches to cracking down, no bill to change alcohol taxes was introduced.

One leading senator involved in this year's debate, however, sees merit in raising alcohol taxes if the revenue is earmarked for drunken driving enforcement. State Sen. Brad Ashford of Omaha, who heads the legislative committee that deals with law enforcement, said he may bring such a proposal to the Legislature next year.

“I think it would raise a lot of money and make a huge difference,'' he said.

Wayne Boles of Lazlo's Brewery in Lincoln said the answer to drunken driving is not more taxes, but making sure alcohol is being used responsibly. He said the Nebraska hospitality industry is doing its part by increasingly training servers on when to cut off the tap.

“We believe responsible practices are the solution,'' he said.

Since the repeal of Prohibition in 1933, the federal government and states have levied an excise tax on every gallon of alcohol sold, assessed on alcohol wholesalers and producers and built into the final price consumers pay.

While sales taxes are usually also applied to alcohol sales, safety advocates say the excise tax is a recognition that alcohol is not like toothpaste, clothes or other consumer products, but a potentially addictive and often abused legal drug.

“We know alcohol is different than all other products because of the potential harm that it causes,'' said Sarah Mart of the Marin Institute, an alcohol industry watchdog.

According to the U.S. Centers for Disease Control and Prevention, excessive alcohol consumption is responsible for about 79,000 deaths in the United States annually, making it the third-leading cause of preventable death.

In addition to direct medical problems such as liver failure, cancer and hypertension, it contributes to a number of social ills, including traffic crashes, assaults and other crime, child neglect, sexual assault and unsafe sexual behavior. Almost four out of every 10 U.S. traffic fatalities are alcohol-related.

And while most people use alcohol responsibly and safely, it is often abused. About one-third of those who drink alcohol report binge drinking, or the consumption in one sitting of five or more drinks for a man or four or more for a woman.

Last year a panel of public health experts convened by the Centers for Disease Control renewed the call for increased alcohol taxes as a way to reduce drunken driving and other alcohol-related ills.

They said studies have consistently found tax increases to be an effective intervention strategy, decreasing overall consumption, youth consumption, binge drinking and alcohol-related crashes and deaths.

On average, the CDC study found, a 10 percent increase in the price of alcohol reduced consumption by 7.7 percent, with alcohol-related crashes and other problems falling by like levels. Smaller increases produce proportional results.

But over the years, the federal alcohol tax and those in most states have been moving the opposite direction.

The reason: Because alcohol excise taxes are based on fluid volume rather than price, they don't increase with inflation. So while sales, income and property tax collections tend to naturally grow over time even with no change in rates, the relative excise taxes on alcohol have quietly fallen with each passing year.

Federal tax rates on wine and beer have been increased only once since 1951, and the spirits tax twice. Several states haven't changed rates since the 1960s.

Nebraska has paid more attention to alcohol tax rates than most states. During the 25 years between 1960 and 1985, Nebraska increased the tax seven times. But in the 25 years that followed, rates were raised just once, in 2003. Iowa last increased its rate in 1986.

The CDC study noted that by failing to adjust tax rates over the years, policymakers have made alcohol more affordable and available. A six-pack of Budweiser would cost almost 20 percent more today if federal excise taxes had kept up with inflation.

Advocates say the revenue from alcohol taxes can be used to pay for more treatment and help defray the high costs alcohol abuse imposes on government and society. A Columbia University study found that almost 16 percent of states' budgets can be traced to abuse of alcohol and other substances, most of the costs for health care and criminal justice.

Public health officials are increasingly coming to grips with what a significant public health problem alcohol addiction is, much as they came to realize the dangers of public smoking 20 years ago, said Susan Foster of the National Center on Addiction and Substance Abuse at Columbia University. She is hopeful that at some point elected officials will share the concern.

There are likely a number of factors contributing to falling alcohol taxes, including a pervasive national anti-tax climate.

The industry is no doubt politically influential, always a major source of campaign cash for state and federal candidates.

The industry also has successfully emphasized its economic impact. There's a proposal in Congress right now to reduce excise taxes on microbreweries as a way to encourage the industry's growth.

“They've been very effective at keeping those taxes low,'' Foster said.

Walt Radcliffe, a longtime alcohol industry lobbyist in Lincoln, said one reason alcohol tax rates have not often changed in recent years is because, in the overall budget scheme, they generate little revenue. The $27 million that Nebraska collected in alcohol excise taxes last year was less than 1 percent of state revenues.

Radcliffe discounted the strength of the alcohol lobby, saying those opposed to alcohol also have strong advocates in people such as football coaching legend Tom Osborne. “Neo-prohibition is alive and well in Nebraska,'' he said.

Wolford, the Spirit World owner, said she thinks alcohol taxes are a sensitive issue most lawmakers simply don't want to touch. There are deep emotional feelings on both sides — those who feel strongly that alcohol is dangerous and those who feel their livelihoods are at stake.

“If you're seen as pro-alcohol, that doesn't make you look good, but if you're anti-alcohol, that's not good, either,'' she said. “They can't win.''

Contact the writer:

444-1130, henry.cordes@owh.com

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