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Study links booze, taxes to public health

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sillouhette of a drunken guyA study out of the University of Florida has concluded that raising taxes on alcohol leads to lower rates of alcohol-related disease, injury, death and crime. The study was released online this week by the American Journal of Public Health in advance of the print edition.

The study found that increasing the average state tax on alcohol (you can see the individual state tax rates on beer, wine and hard liquor here) by a factor of two yielded significant changes in behavior. How significant? It's estimated that it would result in, among other things, a 35% reduction in alcohol-related deaths, a 6% reduction in sexually transmitted diseases and a 1.4% reduction in crime.

The study was funded by the Robert Wood Johnson Foundation, which has a mission "to improve the health and health care of all Americans," and to "help our society transform itself for the better."

A press release from the Foundation cited Alexander C. Wagenaar, a professor of health outcomes and policy at the University of Florida College of Medicine, as saying that "increasing the price of alcohol will result in significant reductions in many of the undesirable outcomes associated with drinking." In fact, higher alcohol taxes were found to have a more significant impact on drinking than alcohol abuse prevention programs.

Others were not so sure. Lisa Hawkins, vice president of The Distilled Spirits Council, said: "Numerous studies, including research from the National Institute on Alcohol Abuse and Alcoholism, show that alcohol abusers are the least sensitive to tax increases. It is the moderate, responsible consumer who cuts back the most when prices rise." She went on to say that, "according to government statistics, there is no relationship between alcohol excise tax rates and alcohol-related traffic fatalities."

It's an interesting question, for sure, whether an increase in alcohol taxes would affect heavy drinkers or merely moderate drinkers. The smoking industry has found that skyrocketing taxes on cigarettes has not eliminated the desire of many to continue smoking; perhaps the same will hold true for booze.

What is true, however, is that taxes on alcohol, like those on cigarettes and other products subject to "sin taxes," tend to be the easiest taxes to boost in a bad economy. The political fallout is not as immediate as, say, an increase in income taxes. This makes alcohol an easy target for revenue-raisers, a fact confirmed when you look at prices. According to The Distilled Spirits Council, federal, state, and local taxes accounted for $7.81, or 55%, of the average $14.13 price for a typical 750ml bottle of 80 proof distilled spirits in the United States in 2009. That's more than half. It makes you wonder exactly how high those taxes can go.

It's a difficult balance. On the one hand, the U.S. likes to think of itself as a country that allows you certain freedoms -- including the freedom to drink alcohol. However, the health concerns associated with drinking too much pose a threat to public health. The question of how to mesh the two clearly hasn't been resolved.

Russia, where alcohol-related deaths and illnesses are climbing at an alarming rate, seems to have found its peace with the issue, with Finance Minister Kudrin encouraging drinking as a means of keeping the economy going. Such a campaign would be met with controversy here in the U.S. -- but there's something to be said for Kudrin's honesty.

It's doubtful that this issue of how much to tax alcohol will be resolved anytime soon. The question, however, will continue to make headlines so long as the economy is struggling.


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