$182.5 Billion Alcohol Tax Proposed to President Obama

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FOR IMMEDIATE RELEASE                                                      
 


San Francisco, CA (November 29, 2012) – Alcohol Justice presented President Barack Obama, Treasury Secretary Timothy Geithner and key Congressional budget leaders with a plan today to raise up to $182.5 billion in new revenue over the next 10 years. The proposal’s key element – a substantial alcohol tax for beer, wine and spirits – has the potential to fill 11.8% of the $1.55 trillion new revenue portion of the President’s stated $4 trillion deficit reduction goal.

“Alcohol taxes should at least reimburse the federal government for the cost of alcohol-related health and public safety services,” stated Bruce Lee Livingston, Executive Director/CEO of Alcohol Justice in his letter to the nation’s budget leaders.

Alcohol Justice released a detailed economic analysis of four scenarios for alcohol tax increases, starting from $11.9 billion new revenues over ten years by simply adjusting alcohol taxes for inflation. At the high end, Alcohol Justice strongly recommends increasing taxes a dime per drink on spirits, 15 cents for beer, and 18 cents for wine, totaling $183.5 billion when indexed for inflation. Since 1991 the federal government has lost $57 billion in revenues for failing to index alcohol taxes to inflation. The proposal also promotes taxing beer and wine like spirits, based on ethyl alcohol proof volume, a public health improvement that links taxes to harm. 

“We’ll fall off the fiscal cliff without a beer barrel tax increase,” Livingston added. “We believe the $182.5 billion in new revenue is a fair contribution to deficit reduction that will help us avoid more onerous taxes or spending cutbacks. We would bet President Obama and Congressional leaders a case of non-alcoholic cider that any poll will show beer taxes more favorable than eliminating the mortgage deduction or gutting Medicare.”

A peer-reviewed study of alcohol harm estimated that alcohol consumption annually costs American society $223.5 billion (2006 estimate), of which government’s cost is $94.2 billion. The article, published in the American Journal of Preventive Medicine in 2011, shows alcohol is unlike other commodities because it causes harm to the general public and costs to government through its consumption.

Along with helping to avoid more draconian budget cuts, Alcohol Justice is dedicated to reversing the catastrophe of alcohol-related harm by reducing excessive consumption and providing needed funds to mitigate harms. “While the total harmful cost of alcohol to the country is equal to $1.90 per drink, and the government’s share is 80 cents, current federal and state alcohol taxes are less than 8 cents per drink,” said Livingston. “Clearly, DISCUS and the Beer Institute have been very effective in minimizing their taxes and fees and avoiding their fair share.” 

“The U.S. beer tax is 1/6 the rate of the United Kingdom beer tax,” wrote Livingston. “This makes beer the booze of choice for price-sensitive U.S. youth. With a higher proof tax rate youth consumption will be reduced and thousands of underage lives will be saved annually.”

For additional information and the full report, please visit AlcoholJustice.org. To send a letter of support for an alcohol excise tax increase to the President and Congressional leaders go to: The Alcohol Justice Grassroots Action Center. Alcohol Justice is a 25 year-old alcohol industry watchdog based in the San Francisco Bay Area of California.