Could Increasing Taxes on Alcohol Reduce the Amount of Alcohol Related Accidents?
The American Journal of Public Health recently published a new study that suggests increasing the taxes on alcohol could potentially reduce the number of alcohol related accidents.
University of Florida researchers examined the results of a 2009 tax increase on beer and spirits in Illinois. Over the course of the year, the state increased its taxes on wine by 66 cents a gallon and on beer by 4.6 cents per gallon. For distilled spirits, the tax increase amounted to $4.05 per gallon.
According to UF researchers, the number of alcohol related fatalities in the state of Illinois dropped by 26%. This surprising decrease was most notable among young adults at 37%. Fatal accidents involving driving while intoxicated and extremely intoxicated motorists declined by 22% and 25% respectively.
Alexander Wagenaar, a professor in the University of Florida’s Department of Health Outcomes and Policy, postulated that similar tax increases on alcohol related products could prevent thousands of accidents and hundreds of deaths each year if they were to be implemented nationwide. He contends that, if politicians wish to effectively address the issue of intoxicated motorists on the roads, then the trend of allowing inflation to erode alcohol taxes must be reversed.
Wagenaar’s theory mirror the study’s observations that alcohol has become more affordable in recent years due to a significant decrease in alcohol tax rates. The study concluded that an individual who had an average of 10 drinks each day would spend more than half of their disposable income on alcohol in 1950. However, in modern times, a person who had 10 or more alcoholic drinks each day would only spend 3% of their disposable income on alcohol.
According to Wagenaar, this violates many economists’ conventional wisdom that heavy drinkers do not respond to tax changes. Instead, he believes that it demonstrates powerful implications for how states can ensure their communities’ safety.
However, there are some who question if the situation demonstrates a true cause and effect relationship.
David Ozgo, a vice president for the Distilled Spirits Council of the United States, poses the same question. Ozgo states that fatal alcohol related accidents in Illinois were already on the decline for the new tax hikes were implemented.
In a press conference, he released the following statement:
“In fact, the largest annual decline over the last eight years occurred in 2008, the year before the tax rate changed. Importantly, Illinois alcohol-related traffic fatalities declined faster than the national average before the tax increase and this has not been the case since the tax increase.”
His observations do make us wonder if the tax increase is really the driving factor behind Illinois’ decrease in DWI related fatalities. Consider the average abuser of alcohol. Is a trivial increase in alcohol taxes capable of stopping him or her from purchasing alcohol? Will it prevent them from getting behind the wheel of a car after drinking?
If you have been arrested and charged with a DWI in the Commonwealth of New Hampshire, then you need to have an experienced NH DWI lawyer on your side. Contact our offices today to schedule a consultation.