Alcohol Taxes Series, Article 2: Most State Alcohol Tax Policies Still Stuck In The Past

In spite of the deep recession and troubling budget shortfalls, alcohol tax policies in many states haven’t been updated for decades and remain stuck in the 20th century.

According to the U.S. Center on Budget and Policy Priorities, at least 46 states have struggled with budget shortfalls for the 2011 fiscal year. Nevertheless, most state alcohol taxes (especially beer taxes), have been untouched for decades. For example, here’s a list of 10 states and the year when beer taxes were last raised:

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  • Wyoming – 1935
  • Pennsylvania – 1947
  • Louisiana – 1948
  • Michigan – 1966
  • West Virginia – 1966
  • North Dakota – 1967
  • Georgia – 1967
  • Wisconsin – 1969
  • North Carolina – 1969
  • South Carolina – 1969


(Source: Center for Science in the Public Interest,
States Ranked by Alcohol Tax Rates: Beer)

In fact, there are only eight states that have raised beer taxes at all since the year 2000. When inflation is factored into stagnant alcohol tax rates, the reality is clear: many state governments are making it cheaper to drink, year after year, when they can least afford the rising costs of dealing with alcohol-related problems and crime.

There have been a number of proposals for increasing alcohol taxes in various states over the past several years, but only a few have been successful. Efforts to update state alcohol tax policies have been derailed by an overall lack of information and confusion about most states’ outdated policies. Oftentimes, the alcohol industry works hard to contribute to the confusion. However, a 2004 study by the American Medical Association showed that, when they are informed about their state’s alcohol rates, most Americans would support an increase.

Alaska is one state that has been successful in modernizing its alcohol tax rates over the last 27 years. The state’s alcohol taxes were raised significantly in 1983 and again in 2002. Alaska now has the country’s highest beer tax of $1.07 per gallon. Researchers from the University of Florida studied the effects of Alaska’s increased alcohol taxes and found that it undoubtedly saves lives. After alcohol taxes were raised in 1983, alcohol-related deaths in Alaska dropped by 29 percent. When alcohol taxes were raised again in 2002, alcohol-related deaths subsequently fell another 11 percent.

The compelling evidence from Alaska should bolster existing and future efforts around the country to modernize state alcohol taxes.

Sources:
Center for Science in the Public Interest, cspinet.org
“Factbook on State Beer Taxes, Center for Science in the Public Interest.
Excise Tax Rates by State, taxfoundation.org.
“Study: paying more for alcohol saves lives,” CNN.com, December 8, 2008.

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