Tax Cheap Drinks
Rarely do governments in the U.S. attempt to control drinking by raising prices. Price increases (Read: Taxes) are usually instituted raise revenue in general. But this isn’t the case around the globe. Often times tax hikes on alcohol are instituted to decrease drinking in general.
Now the BBC reports that the US Prevention Research Center looked at alcohol sales in Sweden between 1984 and 1994 and found that tax increases do not necessarily reduce drinking. In fact, the study found that taxes on alcohol that occurred across the board actually led to an increase in drinking as people simply looking for cheaper alternatives.
But here’s the kicker. When taxes were raised on less expensive alcohol products only, consumption did decrease.
Though I’m not totally educated on the issue, I don’t think there is much taxing going on in America aimed at lowering consumption in general and if it were, it would be interesting to hear the arguments for only raising taxes on cheap drinks were some state to pick up on this study.
Here in America, we are more apt to see calls for increased taxes to raise revenue either to fill state coffers in general or to be used to fight the costs of alcohol abuse. I’m not particularly opposed to that type of taxing, assuming it’s not really massive a la tobacco.