Impact of a $.25 per drink tax increase: Who really pays the tab?

Raising the price of alcohol through excise taxes is an effective, evidence-based means of reducing excessive alcohol use – the third leading preventable cause of death in the US annually. However, one argument against a tax increase is that moderate or lower risk drinkers will be unfairly burdened. To investigate the impact of a $0.25 tax increase on lower versus higher risk drinkers, data from the 2008 Behavioral Risk Factor Surveillance System was analyzed. Higher risk drinkers were those who reported any of the following in the past 30 days: binge drinking, heavy average consumption, daily drinking exceeding the 2005 US Dietary Guidelines, or impaired driving. The average number of drinks consumed by an individual was multiplied by the $0.25 tax increase, extrapolated to an annual estimate, and aggregated to the population level by selected demographics. Approximately half of all drinkers were higher risk. A hypothetical tax increase of $0.25 would result in a per capita annual tax of $131 for higher risk drinkers versus $28 for lower risk drinkers. The total aggregate annual tax equaled $9.1 billion; 83% accrued to higher risk drinkers. Groups most affected by a tax increase included those aged 21 to 30 years, males, those of white race, college graduates, and those employed or earning $50,000 or more. Although a tax increase would likely affect the amount of alcohol consumed overall, this study demonstrates that a tax increase would be borne disproportionately by higher risk drinkers and those with advantaged socioeconomic characteristics.->