Why Raise Alcohol Excise Taxes?
In most states, alcohol taxes have not increased in decades and their value has dwindled with inflation. Dormant tax rates have also contributed to a gradual and substantial decline in the price of alcoholic beverages.
According to the National Institute on Alcohol Abuse and Alcoholism (NIAAA), lower prices on alcohol are associated with increased levels and frequency of drinking, particularly among underage persons. Aside from providing a source of new revenue, increasing taxes on alcohol will deter underage use, reduce traffic-crash fatalities and certain crimes, and decrease alcohol-related health problems such as cirrhosis.
In some states, the new revenue may be available for public health and safety programs to enforce liquor laws, prevent teen drinking, provide treatment for alcoholism, or support traffic safety.
In most states, even small increases in taxes -- pennies per drink -- would translate into significant new revenues. These revenues take on more importance these days, as many states struggle to overcome budget deficits.