NCPA - National Center for Policy Analysis

Taxes Ineffective in Combating Underage Drinking

September 26, 2003

Congress was clear in its intentions when it allocated half-a-million dollars for the National Academy of Sciences (NAS) to develop a cost-effective strategy for reducing and preventing underage drinking. To fight underage drinking, NAS recommends raising taxes on beer.

But according to David K. Rehr, president of the National Beer Wholesalers Association, raising taxes on beer will not prevent underage drinking:

  • It will punish the 90 million adults of legal drinking age who enjoy this product.
  • If increased taxes were a successful deterrent, then underage drinking should have dropped dramatically in high-tax states such as Alaska and Florida, but this is not the case.
  • There is no data indicating a pattern that higher taxes lower the occurrence of illegal underage drinking, and NAS had no science to rely on to make this recommendation.

Already, approximately 44 percent of the cost of every beer sold in the United States today is consumed by taxes. This comes largely out of the pockets of America's lower- and middle-income taxpayers, since more than half of all beer sold is consumed in households with less than $45,000 annual income.

Illegal underage drinking deserves the nation's serious attention. It doesn't deserve a non-scientific study focusing on unproven methods that fail to identify real solutions, says Rehr.

Source: David K. Rehr, "Underage drinking," Washington Times, September 26, 2003.


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