Would a higher beer tax cut crime?
A professor argues that raising the tax on beer would reduce both consumption and crime. But powerful lobbies make that move unlikely.
Would raising the tax on beer reduce the number of young folks who get caught up in crime and the high budget and social costs of locking up so many people?
In a provocative article, "The Economist’s Guide to Crime Busting," in the new issue of The Wilson Quarterly, Duke University’s Philip J. Cook and the University of Chicago’s Jens Ludwig suggest that it would. (The article is here, but isn’t free.)
The profs argue that crime policy (from an economist’s point of view) should focus "both on making criminal opportunities less tempting and the law-abiding life more rewarding" and offer three strategies which they say have been shown to do just that: raising the mandatory age through which kids must attend school; creating business improvement districts with private security guards (a tactic Los Angeles has used with great success); and yes, raising taxes on alcohol.
"It’s obvious," they write "that in considering criminal opportunities, such as whether to break a beer bottle over the head of the obnoxious Yankees fan on the next bar stool, people often make foolish, impulsive choices. There are many reasons for that -- hormones, immaturity, stress -- but surely one of the most important is intoxication."
The average state excise tax on beer, they note, is now only about 10 cents per 12-ounce bottle. Raising it to 55 cents they write, would persuade some teenagers "not to pick up that second six-pack on Thursday night" and would produce such extra benefits such as "fewer auto accidents and more money for state treasuries." Data from Cook’s 2007 book, Paying The Tab, suggests a 55-cent-per-bottle levy would reduce beer consumption perhaps 10% and crime maybe 6%, they note.
"It’s not just beer,"’ Cook said in an interview. "We should also be interested in raising the liquor tax. Wine may be off the hook, since it’s not connected to crime." (That’s because wine, in the U.S. anyway, is a small part of total alcohol consumption and is imbibed mostly by old fogies, who don’t drive up the crime rate.)
Cook notes he’s made "something of a career writing about the beer tax" and that his arguments have "fallen mostly on deaf ears." Congress hasn’t raised alcohol taxes in 20 years and over the last half century taxes on alcohol, when adjusted for inflation, have fallen sharply.
Even more remarkable, while cash-strapped states have been desperately looking for sin taxes to raise (and new types of sin to tax), they’ve mostly steered clear of alcohol. According to the Tax Foundation, 18 states raised tobacco taxes in 2009 and another seven boosted them in 2010.
Alcohol? Only five states raised those levies in 2009 and in 2010 none did. But Massachusetts voters did approve a November 2010 ballot initiative, pushed by the Massachusetts Package Stores Association, eliminating the sales tax on alcohol sold in stores, effective Jan. 1, 2011. Massachusetts legislators had extended the sales tax to alcohol in 2009, the same year they raised the sales tax rate from 5% to 6.25%. Without the added sales tax, Massachusetts’ tax on beer is just 11 cents per gallon, compared to a 55 cents per gallon tax on wine and $4.05 per gallon tax on hard liquor.
It’s not just Massachusetts where beer enjoys a tax edge. For example, Maryland -- a Blue state that has rarely met a tax it wouldn’t raise -- imposes a 9-cent-per-gallon tax on beer, compared with 40 cents a gallon on wine, and hasn’t raised either tax since 1972, despite lobbying efforts by a coalition of health and social services advocates.
What accounts for such low beer taxes? Cook notes the political dynamics of beer are somewhat different than those in the current fight over taxing sugary drinks, in which national groups have taken the lead. For example, in Washington State last year, the American Beverage Association, (currently chaired by a PepsiCo executive) spent $16.5 million on a successful ballot initiative to repeal the state’s new temporary, 2 cents per 12 ounces tax on soda and other sugary beverages. The Massachusetts fight, by contrast was funded largely by local package stores , distributors and organizations with the Beer Distributors of Massachusetts kicking in $300,000 of the $2.8 million raised.
"The beer distributors are a powerful political force in a lot of states. It’s not Anheuser-Busch,"’ says Cook.
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Right...let's pretend it's not because we want the money, it's because we care about you so much. Prohibition was a failure but hey, at least those folks were being straightforward. If governments gave a crap they wouldn't be bankrolling their projects off this decadent lifestyle (/sarcasm).
Besides, the young and broke are already buying the cheapest swill there is.
"Teenagers will not pick up that second six pack on a Thursday night"? Uh, it's already illegal for teens to drink.
Enforce the laws already on the books.
A higher tax would do NOTHING unless it was so exorbitantly high that NO ONE could afford beer; then bootlegging, here we come!
Maybe a slightly higher tax that could be put towards education would be a good idea, but we all know what happens when the money gets shifted into another state coffer (see: lotteries).
1. Put a $5000 per year tax on anyone calling themselves an "ECONOMIST".
2. Make all "ECONOMISTS" do actual work for a living every other year.
3. End Tenure for all "ECONOMISTS".
Problem solved on 99% of all ECONOMIC theories and postulates.
People will be brewing their own and some will do it in a quantity that they can sell without the high taxes and it will all breed another group of gangs and thugs.
Some stupid educated people NEVER learn.
Also, note that they would not tax wine. Wine is for the self-anointed intelligentsia. Beer is consumed by commoners. They just want to control the "riff-raff". In other words, the professors sound like old-style "limousine liberals".
If you accept their "logic", you must also conclude that Prohibition worked and the "war on drugs" has been a shining success. Of course, none of those things have happened. But, still, some groups and individuals will still propose the same old, tired nonsense, and believe that _this_ time, it will work.
A heavy tax on beer would have little effect on the crime rate, but it could lead to more attempted shoplifting in stores which sell beer. You might see obesity rates drop slightly as heavy beer drinkers switch to something else. College kids would not be happy, but they would still buy it. The home brewing business would explode.
As Randy stated, prohibition does not work for things people really want. It didn't work for booze back in the 1920s, but it did make the mafia a very wealthy enterprise. The so-called war on drugs isn't working, in spite of spending billions of dollars each year to fight it. States used to outlaw gambling, but they figured out how much revenue the lottery and casinos would add to the coffers, and now more states have some form of gambling than those which don't.
A beer tax would not change my personal consumption at all. I doubt if I drink more than 3 or 4 beers per week, and they are all microbrews, and price is not an issue.
If they want to increase tax revenue and decrease crime…legalize it! And, Yes, I totally agree about the prohibition posts…prohibition only INCREASED organized crime and gave people like the Kennedys the income as rum runners to buy their political power. Raise the price of beer and increase the amount of hard alcohol being consumed. More bang for the buck right? Nothing quite like Tequila to help sober people up and I am sure Mexico would love the extra income...as the cartel does now...
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