First, he links to a PDF of a 14-page study which he says proves that taxation decreases drinking and related auto accidents. I read the conclusion to the paper. It said, “The weight of the evidence suggests that the effects are relatively modest, with a 1-percent increase in price expected to lead to less than a 1-percent decrease in consumption.” Not exactly damning evidence. It also said, “Young adults are at special risk for alcohol-related problems. While there is evidence that increases in alcohol prices or taxes reduce youth drinking, one study found that this effect may not hold for binge drinking among college students.” Again, very wishy-washy.

But the worst was yet to come. In Leitzel’s next paragraph, he talks about “internalizing” the external costs of alcohol use via excise taxation. It took a couple of reads to really grasp his point, but I think I see it now. He feels that alcohol use has the external cost of drunk driving accidents. And the fact that all taxpayers, not just drinkers, are forced to pay these external costs, then it is, in effect, a subsidy for drinkers. Thus, if we hike the tax on drinkers, then we localize the costs to the people who are most likely to create the costs: the drinkers. Thus, it’s more of a usage-fee than a traditional tax.

Sorry, not gonna buy that line. The logic just doesn’t follow through. Responsible behavior, with anything in life, is part of your character sum. It varies from person to person, regardless of the behavior that one is engaging in. Simply because I consume a glass of beer does not automatically lump me in with a category of irresponsible people. I find many, many problems with enacting a “usage-fee” on anyone who engages in a certain activity, simply because a miniscule percentage of those people do so irresponsibly.

And using the old argument of “well, our society is socialized, therefore, taxpayers are forced to pay for the costs of drunk driving anyway, therefore, we need MORE socialization to offset it” doesn’t fly either. Yes, because our country has been largely socialized, if there is a massive accident resulting from a drunk driving incident, then the whole of taxpayers bear the financial load for it. But this aggression, this theft, at the hands of the State, should not beget even more theft, no matter how localized you make it. This new theft will not result in lower taxes in other arenas, you can be sure of that. So this is not, as Jim says, going to “enhance the working of the market”. The nature of the beaurocracy is not of that manner. If you cut costs in one arena, it simply expands its tendrils in other arenas. It never gives back, it never loosens its grip. No matter how much you try to localize external costs, the only way to truly do so is to end the state aggression against its citizens. And one act of theft is no excuse for another.

I see what Jim was trying to get at, but again, I just don’t buy that line, in the greater scheme. He’s trying to back away from the “behavior modification via taxation” principle, and instead, use it as a sort of “shifting the burden to those more likely to cause it” thing.

But Mr. Leitzel’s proposal is shaky, at best, and all one needs to do is look at the reality, look at the Washington Post article from yesterday about the horrible effects of DUI convictions on people’s lives. There was a woman on there who never drinks. She had one single cognac & coke, and had a .09, went through a yellow light, and ended up in prison. Meanwhile, I personally drink quite a bit. Not binge, not quantity, but quality. In other words, I SPEND quite a bit on alcohol. Good craft/artisan beers, quality wine. And I am perfectly responsible with my consumption. But, with Mr. Leitzel, we are lumped into the same category. One woman, who never drinks, and therefore, pays very, very little into the “usage fee” tax pool, but she is irresponsible, and much more likely than I am to incur the costs of drunk driving. I, on the other hand, would be paying quite a bit into Jim’s proposed “usage fee” tax pool. Yet, I do not contribute to the risk, to the costs, and I am not likely to. And that is the biggest problem with Jim’s proposition. His “internalization” of costs related to drunk driving are no more rational than taxing everyone who owns a gun because a minute few people use them to kill.

Nice try, though.

We don’t have to pay for our alcohol. There’s always a guy who’ll buy it.

On another level- Sin taxes create crime.

Taxed alcohol makes hard liquor more cost effective. To get to the desired level of inebriation, beer and wine will have diminishing bang for the buck.”

I think the experience of the sundry Scandinavian countries, where booze is exhorbitant and alcoholism rampant, would tend to illustrate this nicely. Beer wasn’t even LEGAL at all in Iceland until 1989.

If Leitzel wants to raise alcohol taxes it’s going to have a much wider economic impact than he predicts. Bars are greedy places, and owners would gladly use the excuse of a marginally higher tax to jack up prices, then blame the government. Ill-informed patrons (sadly, probably a majority) have a choice to make: shell out for the extra cost, or stop attending bars as often. If alcohol consumption moves to a merely periodic event due to higher bar tabs, bars will close, which costs jobs, particularly those of young people who tend to drink more. If watering holes become scarce or prohibitively costly, drinking will move away from a scrutinized, regulated industry and into private homes, where there are no bouncers to kick out troublemakers and check IDs. The alcohol industry as a whole may not feel a direct impact, but the alcohol conveyance industry (and those who supply it) definitely would.

http://www.overlawyered.com/archives/001332.html

My initial Overlawyered guest post calling for higher excise taxes on alcohol in the US motivated a particularly thoughtful and lengthy reply from Radley Balko over at The Agitator, and his post has been followed by a fair number of…

“Awww, man, I’m gettin FUCKED UP to-NIGHT, bruh!”

“Oh, shit, dude! Check it out! New excise taxes on the drink! Now, instead of that MD 20/20 costing us $3.15, it’s gonna cost us $3.50! Damn. Looks like it’s back to Sunny-D, boys. No binge-drinkin’ tonight.”

Which brings me to another point. You go out to a bar, you pay, what, $4 or $5 for a bottle of Budweiser? That’s a HUGE markup. But people still pay it, right? So, if they’re willing to pay that huge bar markup, do you really think that an extra few cents will have any effect? Most people probably wouldn’t even notice!

Another policy wonk (…ah, how to phrase this?) seasoning the soup isn’t even worthy of comment, except for the fact that this particular one is capable of doing so much better.

Come on, Radley! Suit up! The revolution is upon us! Why waste your time arguing about the effectiveness of taxes to control behavior, when we know that all taxes are theft? Nuanced, civilized debate has no place here! Instead, we must react to any and every statist argument with extremist, purely-principled, all-or-nothing calls for revolution! There is no room for debate!

Ha. Ha. Ha.*

*Sorry, Radley, I couldn’t help myself. Though, I’m sure JT Kennedy or Mr. Sabotta is dreaming up some sort of obsessive retort as we speak. Wheee!

Wait a minute. We tried that and it failed miserably didn’t it?

Never mind.

I’m with JohnT: It’s the culture not the price. There are lots of places where booze is cheap and plentiful that have fewer problems with it than elsewhere where it may be more expensive and/or restricted. I think that we have a particularly bizarre cultural relationship with it, though I am not sure why.

Taxed alcohol makes hard liquor more cost effective. To get to the desired level of inebriation, beer and wine will have diminishing bang for the buck.

So instead of people monitoring their level of drunkedness with entire cans of beer, they will be doing so with shots. It takes more time to consume an entire can of beer than it does to consume a shot. Getting more smashed than intended is a lot easier with hard liquor.

If drunk driving is the concern, encouraging hard liquor consumption isn’t a good idea.

Here is the site. It is set up by a crusty, old scientist who is fed up with the medieval nature of current ‘science studies’.

http://www.numberwatch.co.uk/default.htm

France has much less tax on alcohol but considerably less problems with violence etc.

I think it’s the culture, not the price.

I like the occasional hamburger, a social drink and i smoke. The idea that my pocket should be hit because of the frailty of a few is beginning to repel me.

Radley Balko has a couple nice posts up. First he reams Jim Leitzen for suggesting a higher tax on alcohol

Thanks again — I am trying to write something non-blogospheric on vice taxes and your post is really helpful.