Washington D.C. – As the County of San Bernardino recently announced grant funding to strengthen prosecutions related to Driving Under the Influence, the U.S Senate appeared to be at cross-purpose in its recently-proposed tax reform bill.
The proposed legislation includes deep cuts to the federal excise taxes on alcohol producers, raising concerns that this could lead to more drinking, increased crime, and more alcohol-related illnesses and deaths, including those caused by drunk drivers.
A recent report by the Brookings Institute noted, based on empirical studies that measured the link between alcohol taxes and alcohol-related injuries, the legislation could result in between 280 and 660 additional motor vehicle deaths per year and approximately 1,550 total alcohol-related deaths annually from all causes.
The report also highlighted that the economic costs associated with alcohol are not only driven by deaths but also include alcohol-related injuries, crime, domestic violence, alcohol-related disease, and associated costs to families and local law enforcement and health providers.
Although the alcohol tax cuts have been packaged as a benefit for “craft beverage” producers, it will actually benefit producers across the board; the major producers that dominate the beer, wine, and spirits industries will reap the greatest benefit.
Federal taxes on beer, wine, and other spirits were initially established to raise revenue and to offset costs that drinking presses upon society, detailed above. The proposed tax cut would reduce federal alcohol excise tax revenues by 16 percent by 2019.
An interesting highlight of the Brookings Institute assessment was that, “Based on economic evidence of the negative externalities imposed by alcohol, the total local, state, and federal tax on alcohol should be roughly four times higher than it is now, and certainly not lower.”
The U.S. House of Representatives passed its version of the proposed tax legislation on November 16. The Senate hopes to hold a vote and pass its version of tax cut legislation before Christmas.