Why Everyone Should Like a Liquor Tax Hike

By Jennifer Matesa 10/20/11

Current US alcohol taxes don't come anywhere close to covering the more than $220 billion a year that excessive drinking costs the nation, says a new CDC study.

Alcohol taxes don't nearly cover the cost. Thinkstock

A study released by the US Centers for Disease Control and Prevention (CDC) this week, investigating the social and healthcare costs of drinking, found the cost of excessive alcohol consumption in 2006 was $223.5 billion—or $746 for each man, woman and child in the US. That comes to about $2.11 per standard drink consumed today, or $1.90 in 2006—a lot less than the state, local and federal taxes levied on alcohol, which amount to about about 14 cents per drink. The disparity results in a national alcohol-cost deficit to the tune of about $114 billion. “For comparison, this was almost half the size of the federal budget deficit last year,” writes Timothy S. Naimi, MD, MPH, associate professor of medicine at Boston Medical Center and author of a commentary published concurrently with the study in the American Journal of Preventive Medicine: “The $5.368 billion in 2006 state and local tax and $9.194 billion in federal excise tax in 2006 don’t begin to cover the economic costs.” Naimi recommends “making people pay the true cost of alcohol . . . increased taxes would result in net savings for most taxpayers, and excessive drinkers would pay almost five times as much per capita as low-risk drinkers.” And unlike tobacco taxes, he points out, increased alcohol taxes would be paid mostly by folks with relative social and economic advantages. Of the total costs of excessive drinking in 2006, 72% came from lost productivity, 11% from increased healthcare costs, and 9.4% from criminal justice costs.

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Jennifer Matesa is a Voice Award Fellow at the federal Substance Abuse and Mental Health Services Administration and is the author of the blog Guinevere Gets Sober. She is the author of several books, including the non-fiction, The Recovering Body, about physical and spiritual fitness for living clean and sober. You can find Jennifer on Linkedin or follow her on Twitter.