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My Two Cents: Figures Lie and Liars Figure, The Government's Policy on Alcohol Tax

Posted by Joel Borelli on June 8, 2015 at 10:50 AM

My Two Cents: Original Publication Date September 30, 2010, Figures Lie and Liars Figure, The Government’s Policy on Alcohol Tax By Auguste Dupin

In a recent report on Health.com, a new study is touting the supposed prolific effect of alcohol tax increases leading to massive decreases in public health issues. The report citing the Wagenaar study published in the American Journal of Public Health recently makes the outrageous claim that by doubling the current tax on beer and wine they could be expected to reduce alcohol-related deaths by 35 percent, fatal car crashes by 11 percent, and the rates of sexually transmitted disease by 6 percent, as well as leading to 2 percent less violence and 1.4 percent less crime. This is a classic example of the government’s policy of Figures Lie and Liars Figure, and the sad part is most of America probably believes it. So by this logic if we quadruple the current tax we could reduce alcohol-related deaths by 70 percent? Hell, let’s mark it up 7 times and get rid of the deaths altogether! Ah if only it were that easy, but that’s what they want you to believe.

Make no mistake. The dangers of alcohol abuse are both serious and costly. I am not trying to undermine the efforts at reducing these incidences. But linking the cause and effect of taxation to something like this is foolhardy, and extremely dangerous to the long-term fiscal responsibility for Americans in general and the government in particular. I am appalled at the way our government is keen on using such studies to strike fear in our hearts while slipping its fingers into our wallets. Americans are an unfortunately gullible lot lately, prone to accepting the word of professional doctors and lawyers and politicians with little or no questioning of the facts. To suggest that raising the cost of a six-pack of beer or a bottle of wine by 50 cents is going to reduce alcohol related deaths by 35 percent is taking a huge leap in logic. This supposed public health menace is driven by price? Come on!

Let’s look at the social side of this supposed crisis first. Anyone who has ever been to a popular club or bar at closing time has probably seen someone who has had too much to drink. In fact, most of the patrons would probably flunk a field sobriety test and a breathalyzer test. Thankfully, and in large part to increased education and tougher criminal punishment, most of these folks rely on public transit, cabs or designated drivers. The few that don’t are responsible for endangering themselves and the public. These are definitely people we should consider a menace and find ways to keep them from hurting themselves and the innocent public. However, the cost of a single beer in most bars or restaurants ranges from $2-$5 and can cost as much as $10 in a popular city nightclub. This translates from roughly half to twice the cost of a six-pack purchased in a package store. A glass of white zinfandel will cost you $5 in a bar, but you can buy a whole bottle for $5 in a package store. If people are willing to drink to excess in a bar or club and pay perhaps $30-$60 in the process, how does a measly 50 cents impact the man or woman who simply wants to buy a six-pack or bottle of wine and unwind after a long day or week? It just doesn’t make sense.

Now if we get away from the social aspect and into what might be termed the epidemiological side of this made-up health emergency I still can’t seem to make it compute. The study suggests that though modest, the tax hikes would add up over time and may ultimately curb the heavy drinker who’s seeing his weekly alcohol budget rise, the college student stockpiling booze for a party, and even the social drinker. The key word here is “may” but my favorite Figures Lie and Liar’s Figure part of this statement is the next claim: that these groups respond to price. Well duh! Everyone responds to price, regardless of the product in question. To isolate drinkers and insinuate that raising the price of alcohol is the most effective way of slowing consumption for “this group” is misleading in the extreme. Raising the price of milk will reduce the consumption of milk in a family of four. When the cost of your favorite fruit goes up you buy less or wait till it goes on sale. When filet mignon goes to $15 per pound you buy sirloin at $5 per pound or ground beef at $2 per pound. No matter the product, when the price goes up people cut back or search for a cheaper alternative. Simple economics here folks, you don’t need a fancy study to know this, you just need to have shopped for groceries. So the steady or heavy drinker will simply buy the cheaper alternative. Scrap the Heinekens boys let’s have us a Busch Light tonight! But this will only happen when the increase becomes prohibitive. As I said, 50 cents on a six-pack won’t curb anyone. So what exactly is going on here?

What will eventually wind up happening is in a year or two another politician will enlist the use of another study to supply data that says the initial tax hike wasn’t enough. The beauty for the politicians here is the survey can say whatever it wants and the politician still has the ammunition he will need to take back to an uninformed public that proves he needs more money. The survey will no-doubt assert that the tax hike was directly responsible for whatever decreases were realized, but if they didn’t hit projections the politician will say “We need more of an increase to have the desired effect” and if the results are beyond original expectations the politician will say “See how successful we were with just a little increase, imagine what we can do with more?” And they get this without every really quantifying directly the relationship between increasing taxes and decreasing health risks, because there is no way to directly quantify this, and this is an egregious misuse of the public’s trust.

To further vilify alcohol and support its agenda the study loosely ties alcohol and cigarettes together when discussing possible benefits of taxation, stating “There is some evidence that raising taxes can reduce unhealthy behaviors, even for people who are addicts. Increased taxes on cigarettes and other tobacco products have been shown to reduce smoking rates and influence heavy smokers to cut back or quit.” This is more of their Figures Lie and Liars Figure policy. First, there are huge differences between cigarettes and alcohol. Alcohol comes with a buzz for one, and don’t underestimate this. Most of the alcohol consumption in this country is of the social variety. Having one or two drinks and catching that pleasant buzz while hanging out with friends and family is what people are after in most cases. You don’t get that with cigarettes. Cigarettes is a pure and simple addiction and even long-term heavy smokers will tell you that there is very little satisfaction in smoking a cigarette beyond the satisfying of the physical addiction. Second, the tax increases on cigarettes have been drawn out over the last twenty years. Between the taxation and the government going after the manufacturers, the cost of cigarettes has increased nearly 1,000 percent. The reduction in smoking cited by these studies is, yes, in part the result of people quitting because the cost has gotten prohibitive. But it is also in part due to the reduction in people starting because it is cost prohibitive. But the point is that the cost became prohibitive over an extended period of time. If cigarettes made the jump from $1 per pack to $10 per pack in one giant leap people would be up in arms with our politicians, because despite citing health benefits and cost savings and revenue increases, its just too large a money grab.

So a little at a time over time gets them there, but again, a 50 cent increase to a six-pack doesn’t make it cost prohibitive. If they increase it every year over ten years then yes, it will get prohibitive. And then they’ll be on to tax the next thing into oblivion. If the government really cared about anything besides the money they would simply make the manufacture and sale of alcohol, cigarettes and anything else they deemed unhealthy, illegal. But that doesn’t make the kind of money that taxing it does. The really sad part of all this is that the politicians continue to mismanage the money we do give them, and not in little ways. Why anyone would think that giving more money to the politicians is the solution is just plain stupid.

So we get to the heart of the matter when we read the concluding paragraphs of the article that declare in a state like Maryland that is currently proposing a hike in alcohol taxes, even a 10 cent increase per drink would save the state $214 million in healthcare costs and generate another $249 million in revenues. This, unfortunately, is the real reason for the study and subsequent support in politicians’ offices everywhere: Money. If you’re counting, that’s nearly a half-a-billion-dollar swing. Imagine what that could do for balancing your state’s budget? Imagine what social initiatives we could implement with that surplus? We could put hundreds of teachers in our failing schools and hundreds of policemen on our dangerous streets and make the world a smarter, safer place. These are some of the heartfelt concerns of our nation and the strings the politicians will tie to their lies and gently tug until they slip more money from our wallets. The sad truth is, none of these things will happen with the money. The budgets of most states and certainly the feds are so overdrawn and out of balance that this money would quickly disappear into whatever shortfall the irresponsible politicians have approved. You see, they haven’t been able to spend our money wisely in years, people! What makes you think this time will be any different?

The real tragedy here is that taxes keep going up and so do the budget, and its shortfall. When are we going to stop it? When are we going to hold politicians accountable? I can guarantee you one thing for sure will happen if you let the politicians increase the tax on alcohol. The tax rate will continue to rise and you need look no further than cigarettes for the proof. The real cure for decreasing these tragedies is through education. Teach our youngsters the right way to live and behave and make them aware of the dangers and consequences of misbehaving.

That, my friends, is my two cents. Not that you asked for it.  I need a beer. I better get one while I can still afford them.

Categories: My Two Cents

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