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Derrick Z. Jackson

Saving lives by taxing alcohol

(The Boston Globe)
By Derrick Z. Jackson
Globe Columnist / October 24, 2010

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FELLOW CHARDONNAY sippers and beer quaffers, let us raise a toast to burying Question 1.

That November ballot initiative would eliminate the Massachusetts sales tax that was extended to alcohol last year. The initiative is being pushed by the liquor store lobby, which moans that the 6.25 percent sales tax is killing business, particularly along the New Hampshire border. But just as restaurant and bar owners once cried that smoking bans would shutter their doors, the liquor lobby is making claims that, at least for now, are not proving true.

Anyway, even if the tax does somewhat reduce alcohol sales over time, the benefits to society could be significant.

According to the state Department of Revenue, the tax raised $97 million in fiscal year 2010. It is projected to rise to $110 million in fiscal year 2011. Already, in the first quarter of the new fiscal 2011, the sales tax brought in $33.2 million, $4 million more than what was projected. Furthermore, already existing excise taxes on alcohol showed only a tiny drop between fiscal 2009 and fiscal 2010, from $72 million to $71 million. This suggests that sales of alcohol at liquor stores have not substantially declined.

Meanwhile, the sales tax on liquor has notable benefits. First, it is dedicated to state substance abuse programs. Michael Botticelli, state director of substance abuse services, says the taxes have insulated his department from deeper cuts. Thus, that case of beer helps keep school health programs afloat. The uncorking of a bottle of wine keeps family intervention and smoking cessation programs open.

Second, to the extent that the tax has discouraged some people from buying alcohol, the effect is likely strongest among underage drinkers. As Botticelli put it, “every analysis says that whenever you raise the price of things like tobacco or alcohol, underage kids are price-sensitive.’’

Over time, adults may prove to be more price-sensitive than they have so far. That could be a plus. A Centers for Disease Control and Prevention report this month found that Massachusetts is currently among the top states for adult binge-drinking prevalence. Botticelli believes those rates are related to Massachusetts historically ranking near the bottom of all states for alcohol sales taxes as a percentage of personal income.

A study this month in the American Journal of Public Health found that doubling alcohol taxes results in 35 percent fewer alcohol-related deaths, 11 percent fewer traffic accidents, and other reductions in sexually transmitted diseases, violence, and crime. This is no small deal in a nation that suffers 79,000 deaths a year due to excessive drinking. Study author Alexander Wagenaar, a professor of health policy at the University of Florida said, “We’re already subsidizing drinking in the law enforcement system, car crashes, assaults, domestic abuse, and then in the health care system. Every one of these things is averted by an alcohol tax policy that accounts for them. Otherwise people pay for it in car insurance, health insurance rates, and taxes for police services.’’

Asked about the possible benefits in Massachusetts of extending the sales tax to liquor, Wagenaar said he could offer no specific guess, but said, “I’m comfortable with saying that going from no sales tax at all to 6.25 percent is likely to have a beneficial effect.’’

That makes a repeal of the sales tax tragically shortsighted. It may seem ironic that a bottle of zinfandel may help protect a spouse from an abusive partner or that a six-pack of Sam Adams may help liberate a recovering convict from addiction. But without the sales tax, many of these programs will face deep cuts or extinction. This makes the state sales tax on alcohol a painless thing to swallow at the dinner table, and a “no’’ vote on Question 1 a show of support to fellow citizens struggling with the bottle.

Derrick Z. Jackson can be reached at jackson@globe.com.