Who Would Pay for State Alcohol Tax Increases in the United States?

Excessive Alcohol Use and Alcohol Use Disorders: A Policy Brief of the American College of Physicians

Alcohol is used by more people in the United States than tobacco, electronic nicotine delivery systems, or illicit drugs. Several health conditions, including cancer, cardiovascular disease, and liver disease, are associated with excessive alcohol use and alcohol use disorder. Nearly 30 million people aged 12 years or older in the United States reported past-year alcohol use disorder in 2022, but-despite its prevalence-alcohol use disorder is undertreated. In this policy brief, the American College of Physicians outlines the health effects of excessive alcohol use and alcohol use disorder, calls for policy changes to increase the availability of treatment of alcohol use disorder and excessive alcohol use, and recommends alcohol-related public health interventions.

The pass-through of alcohol excise taxes to prices in OECD countries

Tax pass-through rates to prices measure how much prices increase when taxes are increased by one unit, which will in turn determine the effectiveness of taxation policies in reducing substance use. Using longitudinal data of alcohol prices and excise taxes from 27 Organization for Economic Cooperation and Development (OECD) countries from 2003 to 2016, we estimate the tax pass-through rates to prices for a variety of alcoholic beverages-beer (1.24; 95% CIs: [0.67, 1.81]), wine (2.4; 95% CIs: [1.7, 3.11]), Cognac (1.71; 95% CIs: [1.07, 2.35]), Gin (0.85; 95% CIs: [0.34, 1.35]), Scotch whisky (1.14; 95% CIs: [0.52, 1.75]), and Liqueur Cointreau (1.98; 95% CIs: [1.21, 2.76]). While excise taxes on wine, Cognac, and Liqueur Cointreau are over-shifted to prices, taxes on Gin are exact- or under-shifted. Excise taxes on beer and Scotch whisky are likely over-shifted to prices, but the tax pass-through rates for these beverages are not significantly different from 1 and we cannot completely rule out exact pass-through of taxes to prices. The tax pass-through to prices for most beverage types is also higher for higher-priced products. Dynamic model further shows a lagged impact of wine and beer taxes on prices, indicating pricing strategies that may target lower-priced beer and wine.

Relationships between US state alcohol policies and alcohol outcomes: differences by gender and race/ethnicity

BACKGROUND AND AIMS

Alcohol taxation and availability restrictions are among the most effective methods for reducing alcohol use and problems, yet may affect demographic subgroups differently. Understanding who responds to specific policies can inform approaches for reducing disparities. We examined how state-level beverage-specific taxes and availability restrictions in the United States are associated with consumption and alcohol-related problems across subgroups defined by gender and race/ethnicity.

DESIGN, SETTING AND PARTICIPANTS

Data came from the 2000-15 National Alcohol Surveys (n = 28 251), computer-assisted telephone cross-sectional surveys of United States residents aged 18+. African Americans and Hispanics were oversampled.

MEASUREMENTS

Primary outcomes were beverage-specific (beer, wine, spirits and total) volume, DSM-IV alcohol dependence and alcohol-related consequences. Analyses entailed survey-weighted log-log and logistic regressions adjusting for state-level beer tax, spirits tax, government-controlled spirits sales and sales tax; respondent ZIP-code-level density of off-premise beer outlets, off-premise spirits outlets and on-premise bars; respondent individual-level age, marital status, education, employment and income; and fixed effects for wet/moderate/dry US region and year.

FINDINGS

Higher beer tax was significantly (P < 0.05) associated with lower odds of any drinking among white women [odds ratio (OR) = 0.98] and lower beer volume (price-elasticity = -0.40), total volume (price-elasticity = -0.50) and odds of alcohol-related consequences (OR = 0.84) among African American women. Higher spirits tax was significantly (P < 0.05) associated with both lower beer and total volume among Hispanic women (price-elasticities = -0.73 and - 1.04, respectively) and men (price-elasticities = -1.19 and - 0.92, respectively) and decreased wine volume among Hispanic women (price-elasticity = -0.62). Apparent protective effects of living in a state with government-controlled spirits sales or a neighborhood with lower bar density was greater among white men than other groups.

CONCLUSIONS

The effects of beverage-specific taxes and alcohol availability policies may vary across subgroups, highlighting the importance of considering differential policy impacts in future research and intervention.

Assessing the impact of alcohol taxation on rates of violent victimization in a large urban area: an agent-based modeling approach

AIMS

To use simulation to estimate the impact of alcohol taxation on drinking, non-fatal violent victimization and homicide in New York City (NYC). We simulate the heterogeneous effects of alcohol price elasticities by income, level of consumption and beverage preferences, and examine whether taxation can reduce income inequalities in alcohol-related violence.

DESIGN

Agent-based modeling simulation.

SETTING

NYC, USA.

PARTICIPANTS

Adult population aged 18-64 years in the year 2000 in the 59 community districts of NYC. The population of 256 500 agents approximates a 5% sample of the NYC population.

MEASUREMENTS

Agents were parameterized through a series of rules that governed alcohol consumption and engagement in violence. Six taxation interventions were implemented based on extensive reviews and meta-analyses, increasing universal alcohol tax by 1, 5 and 10%, and beer tax by 1, 5 and 10%.

FINDINGS

Under no tax increase, approximately 12.2% [95% credible interval (prediction interval, PI) = 12.1-12.3%] were heavy drinkers. Taxation decreased the proportion of heavy drinkers; a 10% tax decreased heavy drinking to 9.6% (95% PI = 9.4-9.8). Beer taxes had the strongest effect on population consumption. Taxation influenced those in the lowest income groups more than the highest income groups. Alcohol-related homicide decreased from 3.22 per 100 000 (95% PI = 2.50-3.73) to 2.40 per 100 000 under a 10% universal tax (95% PI = 1.92-2.94). This translates into an anticipated benefit of ~1200 lives/year.

CONCLUSION

Reductions in alcohol consumption in a large urban environment such as New York City can be sustained with modest increases in universal taxation. Alcohol tax increases also have a modest effect on alcohol-related violent victimization. Taxation policies reduce income inequalities in alcohol-related violence.

Annual Total Binge Drinks Consumed by U.S. Adults, 2015

INTRODUCTION

Binge drinking (four or more drinks for women, five or more drinks for men on an occasion) accounts for more than half of the 88,000 U.S. deaths resulting from excessive drinking annually. Adult binge drinkers do so frequently and at high intensity; however, there are known disparities in binge drinking that are not well characterized by any single binge-drinking measure. A new measure of total annual binge drinks was used to assess these disparities at the state and national levels.

METHODS

Behavioral Risk Factor Surveillance System 2015 data (analyzed in 2016) were used to estimate the prevalence, frequency, intensity, and total binge drinks among U.S. adults. Total annual binge drinks was calculated by multiplying annual binge-drinking episodes by binge-drinking intensity.

RESULTS

In 2015, a total of 17.1% of U.S. adults (37.4 million) reported an annual average of 53.1 binge-drinking episodes per binge drinker, at an average intensity of 7.0 drinks per binge episode, resulting in 17.5 billion total binge drinks, or 467.0 binge drinks per binge drinker. Although binge drinking was more common among young adults (aged 18-34 years), half of the total binge drinks were consumed by adults aged ≥35 years. Total binge drinks per binge drinker were substantially higher among those with lower educational levels and household incomes than among those with higher educational levels and household incomes.

CONCLUSIONS

U.S. adult binge drinkers consume about 17.5 billion total binge drinks annually, or about 470 binge drinks/binge drinker. Monitoring total binge drinks can help characterize disparities in binge drinking and help plan and evaluate effective prevention strategies.

Employment impacts of alcohol taxes

There is strong scientific evidence supporting the effectiveness of increasing alcohol taxes for reducing excessive alcohol consumption and related problems. Opponents have argued that alcohol tax increases lead to job losses. However, there has been no comprehensive economic analysis of the impact of alcohol taxes on employment. To fill this gap, a regional macroeconomic simulation model was used to assess the net impact of two hypothetical alcohol tax increases (a 5-cent per drink excise tax increase and a 5% sales tax increase on beer, wine, and distilled spirits, respectively) on employment in Arkansas, Florida, Massachusetts, New Mexico, and Wisconsin. The model accounted for changes in alcohol demand, average state income, and substitution effects. The employment impact of spending the new tax revenue on general expenditures versus health care was also assessed. Simulation results showed that a 5-cent per drink additional excise tax on alcoholic beverages with new tax revenues allocated to general expenditures increased net employment in Arkansas (802 jobs); Florida (4583 jobs); Massachusetts (978 jobs); New Mexico (653 jobs); and Wisconsin (1167 jobs). A 5% additional sales tax also increased employment in Arkansas (789 jobs; Florida (4493 jobs); Massachusetts (898 jobs); New Mexico (621 jobs); and Wisconsin (991 jobs). Using new alcohol tax revenues to fund health care services resulted in slightly lower net increases in state employment. The overall economic impact of alcohol tax increases cannot be fully assessed without accounting for the job gains resulting from additional tax revenues.