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May 12 2015

Alcohol Taxes to Solve Non-Problems

Julie Gunlock

This week, French researchers at the Organization for Economic Cooperation and Development (OECD) recommended governments implement a ten percent tax increase on alcohol to reduce excessive consumption. In particular, the researchers said this move would help reduce consumption among the heaviest-drinking 20% of the population and for those who participate in dangerous binge drinking.

Yet, this is the very demographic that seems impervious to price hikes. According to a 2011 study conducted by researchers at RAND Corporation and published in the Journal of Mental Health Policy and Economics, among all races and ethnicities, the effect of higher taxes on alcohol consumption were only significant among light drinkers and shrank substantially for moderate and heavy drinkers—the very demographic those at the OECD are trying to target.

The truth is, this is a non-issue. Alcohol consumption is declining worldwide and among women, the rate of alcohol intake hasn’t increased much in a decade. According to the National Survey on Drug Use and Health, in 2002, 2.2 percent of women ages 26 and older were considered heavy drinkers. By 2011, that number had only raised a fraction to 2.6 percent. The number of heavy drinkers among men actually shrank in that same time period from 10 percent in 2002 to 9.1 percent in 2011. Among teens and young adults, the rates of underage drinking are also declining. IWF writer Carrie Lukas wrote about this trend in a 2013 Forbes column:

According to the government’s Youth Risk Behavior report, in 2011, 37.9 percent of female high school students reported having one alcoholic drink in the last 30 days, which is down from 49.9 percent in 1995.  The decline among high school boys was similar.  More importantly, binge drinking—the drinking of five or more drinks at a time—fell more precipitously:  28.8 percent of high school girls reported binge drinking in the last 30 days in 1995 compared to 19.8 percent in 2011. 37.3 percent of high school boys binge drank in 1995 compared to 28.8 percent in 2011.

Yet, despite this good news, politicians will likely seize on the OECD recommendations as an excuse to raise taxes to solve a problem that really doesn’t exist. 

Independent Women’s Forum’s mission is to improve the lives of Americans by increasing the number of women who value free markets and personal liberty. Sister organization of Independent Women’s Voice.
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