“Alcohol abuse remains our leading ‘drug’ problem,” writes Philip J. Cook. But our presidents never identify alcohol as the drug that causes the most harm to society. Americans support using taxes and other regulations to curb smoking, but there is an aversion to using such policies to curb alcohol abuse. Cook attributes that aversion to the aftereffects of Prohibition.
A professor of public policy and economics at Duke University, Cook is a veteran in researching and writing about alcohol and public policy. His book surveys decades of research in explaining how much excess drinking costs society, and which policies work and which don’t to curb the harm.
The cost to society, aka the “bar tab,” is “much larger than it needs to be or should be.” One reason is that the cost of alcoholic beverages has declined in constant dollars since the 1950s. That’s because the federal excise tax on alcohol in the 1950s, in inflation adjusted dollars, was more than six times as high as it is today. The excise tax is based upon volume, not value, and the tax has been raised only once since 1951.
The research is clear that a higher “user fee” would save lives while imposing most of the cost on the ten percent of drinkers who consume the most alcohol. There is no question that price increases for cigarettes reduce sales and underage smoking. That happens even though almost all smokers are dependent, compared to perhaps one in ten drinkers. Prices matter with alcohol as well. When prices are cut in half at a happy hour, both casual and heavy drinkers quaff twice as much.
The alcohol industry is aware that higher taxes reduce sales, which is why the industry lobbies so tenaciously against tax hikes. The research shows that young people are particularly price sensitive. “Contrary to conventional wisdom, prices even matter for chronic heavy drinkers...The evidence supporting the public health benefits of increased alcohol taxes is every bit as strong as for cigarette taxes.”
Former Surgeon General C. Everett Koop recognized that the social costs of alcohol abuse far exceed the declining value of the excise taxes. Consequently, he “strongly recommended” a nickel a drink increase in the alcohol user fee. The evidence suggests that a nickel a drink increase would reduce consumption by 12 percent, motor vehicle deaths by 7 percent, suicides by 6 percent and the cirrhosis death rate by 32 percent.
Another reason for the big bar tab is that public policy is mainly used to address only one source of harm from excess drinking, namely DUI. As a result, DUI has declined markedly since the early 1980s. But the alcohol problem is not limited to the highways, and other harms get neglected. Among those are suicide, the transmission of STDs, and fetal alcohol spectrum disorder. One more is from violence that occurs in barroom brawls, date rape, domestic battery and murder. Drinking is involved in at least two out of five injury deaths.
When it comes to tobacco, the public recognizes that availability matters. Consequently, cigarette vending machines were eliminated, and tobacco ads were taken off the air. The public is doubtful, however, that such regulations would work with alcohol. Cook’s review of the research finds that availability does matter: “A ten percent increase in per capita drinking is associated with a 5 percent increase in homicide and suicide, a 9 or 10 percent increase in accidents, and a 15 percent increase in cirrhosis deaths.”
The reformers who abolished Prohibition, such as John D. Rockefeller, Jr., advocated a variety of controls on drinking to prevent abuse. He recommended state monopolies for distribution and retail sales in order to eliminate the private profit motive, and with it the motive to stimulate sales and increase intemperance. Seventeen states did adopt a monopoly system of wholesale distribution for liquor though some included wine as well.
The Illinois Liquor Control Act of 1934, which is still on the books, reflects that Rockefeller attitude by explicitly advocating moderation: “This Act shall be liberally construed, to the end that the health, safety, and welfare of the People of the State of Illinois shall be protected and temperance in the consumption of alcoholic liquors shall be fostered and promoted by sound and careful control and regulation of the manufacture, sale, and distribution of alcoholic liquors.”
Interesting facts:
• The whiskey tax was the first internal revenue measure imposed by the first Congress in 1791. It was advocated by Alexander Hamilton, who contended the liquor tax would produce adequate revenue as well as encourage moderation.
• The whiskey tax was replaced as the main source of federal revenue when the Sixteenth Amendment passed in 1916 authorizing the income tax. Thus the Sixteenth Amendment made possible the 18th Amendment for Prohibition.
• Though Prohibition was a political failure, it nevertheless resulted in a substantial reduction in consumption, particularly of beer.
• After the repeal of Prohibition, bootleggers continued to supply 45 million gallons per year until enforcement was ramped up and deflated the black market within four years.
• If the top ten percent who drink the most could reduce their consumption to that of the next highest drinking decile, then alcohol sales would drop by 60 percent.
• Opponents of raising the alcohol user fee call it a regressive tax, even though the heaviest drinkers would pay most of it, while teetotalers wouldn’t be affected, and light drinkers would hardly notice. Besides, alcohol is not a necessity, like food or electricity, and people of modest means could avoid paying more by reducing how much they drink.
• When it comes to the age-21 laws, the allure of forbidden fruit exists. But research shows that those laws have the overall effect of reducing the likelihood minors will drink and abuse alcohol.
“Alcohol is the source of great enjoyment and also great harm.” Cook makes a persuasive case that the social costs can be significantly reduced without infringing on the enjoyment, by employing effective public policies to reduce the harm.. ###
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