The Volokh Conspiracy

If the objective is to use tax policy to discourage unhealthy drinking habits, it should be done in such a way that responsible drinking is not affected (to the extent possible). Ideally, we'd tax Thunderbird while leaving Dom Perignon alone. Perhaps this will be explained later, but is there any evidence that taxing different types of alcohol or sales differently affects the observed outcome?

In other words, are wine sales more/less price elastic than beer sales? Does increasing taxes on distilled spirits alone reduce robbery more/less than increasing taxes on beer alone? Does increasing taxes on retail sales alone (i.e., not at bars or restaurants) reduce teen STD transmission more than increasing taxes bar/restaurant sales alone?

I notice you don't address the possibility that substantially higher alcohol taxes will lead to a black market in alcohol for those most likely to abuse it. Alcohol is, after all, easier to produce for amateurs than cigarettes or any illegal drug I know of, and there would presumably be quite a bit less social disapproval of an untaxed bottle of alcohol than of a dime bag of weed. Would "Mr. Beer" and other home brewing kits have to be outlawed?

Ge..ge...ge..ge...I'll get them Duke boys!

Good points. But a couple things:

1. I'm one of those people who occasionally "lose productivity due to hangovers." I rather object to the government making it a goal to stop me from doing this (or, in general, from viewing me as a machine or employee whose productivity should be maximized). I lose a great deal more productivity, as it happens, from watching football games; I don't see that as a reason to tax the NFL.
But this isn't that important to your main point, as alcoholism, drunk driving, etc. are all things I'd like the government to try and reduce.

2. You suggest that "heavy drinkers who should be most likely to respond to price, since they’re the ones for whom drinking places a real dent in the household budget." All right. But this also suggests that, while some heavy drinkers cut down on their drinking due to a tax, others, and some of the same ones (and their families) will end up spending more, and thus placing an even bigger dent in their budget. In other words, this is encouraging people to quit drinking by increasing the problems it causes them, which is a little questionable. I assume, e.g., you wouldn't be in favor of requiring all alcohol to contain an ingredient which made it even more unhealthy for your liver, thus providing people with another incentive to drink less. And the waste of money is, for some people, one of the many problems caused by alcoholism.

Note that many state governments are, in fact, keeping prices artificially high, through a method other than taxation.

I'm no economist (understatement of the New Year), but I have to believe that state monopolies over the sale of hard liquor (as in Virginia) drive prices up.

One can only imagine what cigarettes would cost if only the state was allowed to sell them.

I notice you don't address the possibility that substantially higher alcohol taxes will lead to a black market in alcohol for those most likely to abuse it.

Black markets certainly have negative effects which shouldn't be overlooked, but if the health data are correct, then it appears that even with whatever black markets arise after increased alcohol sales, public health metrics show significant improvement. Moonshine isn't replacing legal booze.

In this scenario, the abusers have zero elasticity, while moderate drinkers are price elastic. To which I could point out (and do) that in fact it is these heavy drinkers who should be most likely to respond to price, since they’re the ones for whom drinking places a real dent in the household budget.

Spoken like someone who clearly didn't go to a large state school. Binge drinkers will spend their last cent on alcohol, no matter how much it takes out of the "household budget" (and by the way, if you've ever met a heavy drinker, you'd know that none of them have any idea what a household budget is).

How much does a line of blow cost these days? Has the statist policy of increasing the cost of coke decreased demand or made your life materially better?

I guess I'm troubled with the seemingly accepted notion in this post that reducing use is a good thing that should be pursued by the government. The argument is that taxes should be raised, not because the money will be used for some good, or to cover the costs of administering oversight, but because it will change people's behavior regarding personal use of alcohol.

Again, that's the horrible broad stroke of prohibition that sacrifices the responsible person for the vision of "solving" the problems of irresponsible (or genetically disposed) abusers. How is this a good approach?

Oh, and that weak argument about the price elasticity for addicts? The notion that if the price goes up alcoholics will care about the family budget is laughable. The writer has clearly not spent any time in my part of the city.

Excluding David Bernstein makes a good point, and one upon which I'd like to expand. I'm curious to what extent the studies you describe (without citation, I might add) have controlled for various other social and legal factors. It doesn't seem that much of a stretch, for example, that states raising excise taxes on alcohol would also have implemented more rigorous and advanced treatment programs for alcoholics, alternative rehabilitative judicial dispositions for first-time offenders of alcohol laws, stricter BAC limits for DUI offenses, more money for enforcement of underage drinking laws, etc. These are all priorities (on some level) for the MADD/SADD lobby, and I have to imagine that where such lobby is successful, they get more than one thing that they want.

Further, to what extent is there a COLA-style adjustment in these studies? I was pale-faced in shock the first time I got a bar tab in Washington DC after moving from Pittsburgh, and I'm pleasantly surprised every time I get a bar tab when I go back home.

Believe me, I don't want to be a part of some libertarian flat-earth society here that argues against excise taxes in all forms. I'm sure alcohol does have a downward sloping demand curve through almost all of the population. I'm just not sure that excise taxes are the whole story, or even a necessary precondition to the whole story, of curbing societal ills due to alcohol.

I'll note as well that Latinist hit the nail on the head when pointing out that lost adult productivity is NOT an appropriate aim for this sort of legislation.

Ideally, we'd tax Thunderbird while leaving Dom Perignon alone
It would be easy enough to levy a tax-by-volume rather than tax-by-price. For example, $1 per 6 cans of beer, bottle of wine, or 750ml of hard liquor.

Beer and wine are good for you.

I drink socially, and once in a great great while - maybe once every year or two - may overindulge a little bit. I actually am trying to drink a bit more red wine, just a glass with dinner, because of its health effects, and how it enhances food. Meanwhile I drive safely, work out regularly, eat in moderation, avoid smoking and so forth. I don't cost anybody anything, and in fact subsidize a lot of less healthy people through my auto and health insurance premiums and taxes. I'm okay with that. But I resent the hell out of the notion that anybody else should be able to craft my lifestyle for me by reaching into my wallet yet again. I especially resent having some nanny tsk'ing at me about having a second glass of wine after Sunday dinner. And where does this notion of the moral rectitude of taxation come from? It's a necessary evil to provide essential services, not a moral good with the primary aim of making people more moral and less diseased.

I find this quiet and friendly sort of fascism, we-care-so-much-about-you liberal fascism that you can dress up with a smiley face, far more disturbing than the jackbooted type, because everybody recognizes and is against the jackbooted type. Non-FISA wiretaps affect a few people and there's widespread outrage over them. A relative handful of suspected terrorist fighters are detained at Gitmo, and the outrage resembles the trumpets heralding the apocalypse. Yet kindly, quiet liberty thieves passing as social policies affect nearly all of us, but there's no outrage over it. First it was smoking, next it's booze and food. Maybe the leftists are correct and we're becoming sheep.

My mother in law was an quiet alcoholic who did not binge drink but sipped sherry out of her coffee cup all day long (and smoked three packs of cigarettes a day) She died in 1996 at the age of 62 from the combined effects of the smoking and drinking. She stayed with us for six long weeks once and I ran a short experiment to see what she would do when we did not provide her with sherry. Answer: She would steal it and drink anything with alcohol. My expensive German wine went first and then she moved on to the hard liquor. I believe that if I had let us run out of booze in the house and gave her no money she would have started shoplifting it. Most hard core alcoholics would behave similarly when out of the controlled environment of the study where their only alternative was to buy it, work for it or cut down.

For some reason, there is profound resistance to the idea that beverage alcohol is a commodity with the usual downward sloping demand curve. ... But when I make the argument to non-economists, I get a skeptical hearing.

Didn't someone famous say, "The world is full of economic dipshits?" If not, I'll take the credit.

I pretty much agree with your analysis, with the caveats that (a) I question your use of the word "usual" when it comes to the magnitude of the slope, and of course (b) I am resolutely in favor of cheap booze. I'll take my chances with the drunks on the road.

(1) Have preconceived notions that all problem drinkers have horizontal demand curves.

(2) Encounter the reality that states that restrict alcohol have less alcohol-related disease.

(3) Cognitive dissonance.

(4) ???

(5) Profit!

I suspect that one of the main reasons our alcohol taxes are so low is because of the enormous consumpotion of alcohol by our country's political class. A very large number of the politicians I've met are, to put it kindly, heavy drinkers. These peolpe have a sympathy for dysfunctional alcohol consumption that is reflected not only in relatively low taxes on alcohol, but also in the seriousness with which alcohol is treated in our criminal justice system. Generally speaking, heavy alcohol consumption is treated as a mitigating rather than an aggravating factor in crime. The penalties for harm committed while under the influence are often ridiculously light.

A state public health department once hired me to do a study of the impact of raising the state's (relatively low) taxes on alcohol and diverting some of the resulting revenue into alcohol treatment and prevention programs. My simulation (based on a wide variety of sources and research—including some of Professor Cook's work) suggested that the result would be an enormous increase in state revenue whose impact would be spread relatively evenly across different categories of drinkers. The simulation took account of elasticities in drinking patterns and border effects (the state was realtively small and surrounded by low-alcohol-tax states). I found later that the report was tabled by a legislative aide who, although he found no fault with it, thought it would be upsetting to the legislators who might have had occassion to peruse it.

These are all arguments worth having. But attacking Cook's research or pointing out something that occurred to you after thirty seconds of reading and assuming that Cook is unaware of it doesn't help you. It just makes you look like you're unwilling to face reality.

There's no substance to his research. It's not like we're talking about complex theories of quantum physics that I need to sit and ponder for a couple weeks before formulating a response. His point is simply: alcohol=bad, therefore let's use the tax system to outlaw what we can't do through the legal process.

Why is $13 a fifth the right amount of tax? Why not $2? Why not $200? If your only premise is that alcohol is bad, then there's no amount of tax that's ever enough, since any amount of tax will always decrease the amount of alcohol consumed (assuming the practical point of no black markets, elasticity, etc.).

Beer and wine are good for you.

Provided you are not an alcoholic. As a recovering alcoholic (32 since my last drink) am convinced that moderate drinking is good for the great majority of drinkers. But high taxes, rationing or any such public policy will do nothing to deter the real alcoholic. No law of God or man can prevent the alcoholic from getting a drink.

(1) Have preconceived notions that all problem drinkers have horizontal demand curves.

(2) Encounter the reality that states that restrict alcohol have less alcohol-related disease.

(3) Cognitive dissonance.

(4) ???

(5) Profit!

1. The demand curve would be vertical, not horizontal.

2. Nice strawman. I don't think I've heard anyone suggest that ALL problem drinkers will be unaffected (just like ALL smokers haven't been unaffected by hikes in cigarette prices).

3. Nobody disputes that alcohol causes serious negative externalities (drunk driving, rape/date rape, robberies, assaults, etc.) or that reducing the availability of alcohol would reduce these externalities.

4. Did you live under the same rock as Cook when you were in college?

Beer and wine are good for you.

Provided you are not an alcoholic. As a recovering alcoholic (32 years since my last drink) I am convinced that moderate drinking is good for the great majority of drinkers. But high taxes, rationing or any such public policy will do nothing to deter the real alcoholic. No law of God or man can prevent the alcoholic from getting a drink.

Spoken like someone who clearly didn't go to a large state school. Binge drinkers will spend their last cent on alcohol, no matter how much it takes out of the "household budget" (and by the way, if you've ever met a heavy drinker, you'd know that none of them have any idea what a household budget is).

I wouldn't go quite this strongly, but it is true that those for whom alcohol is a serious problem aren't noted for such long-term goals as a household budget.

I've got an alcohol and marijuana abusing brother-in-law who typifies those at whom Professor Cook is aiming tax increases. His notion of "long-term planning" might be "Do I have enough food in the house for breakfast?" And I have seen no evidence that his planning horizon is even consistently that long-term. He was driving so drunk one night that when he turned the wrong way onto a one-way street, he didn't even notice the police car responding lights and sirens. Nor did he notice that he had hit the police car, until another officer dragged him out the open window, and whacked him on the head with a nightstick.

That said, all proposals to regulate or control behavior through incentives and punishments work at the margins. Will most alcoholics like my brother-in-law change their behavior in response to higher taxes? No. Will some alcoholics change their behavior in response? Almost certainly--and likely the ones whose problems, while significant, are probably the least dramatic.

I am skeptical of the applicability of the study of inmates in an alcohol rehab program. These were probably people who were there voluntarily, or required to be there as part of a criminal justice diversion program. Their behavior is likely different from alcoholics not in such a program simply for that reason.

But high taxes, rationing or any such public policy will do nothing to deter the real alcoholic. No law of God or man can prevent the alcoholic from getting a drink.

One concern that I have are people whose alcohol problems start very young. My impression is that a lot of alcoholics start very young. I'm not sure that high taxes will reduce this; perhaps more vigorous enforcement of minor in possession laws would do some good. Here in Idaho, it is unlawful to provide alcohol to a minor, and from what my son tells me of high school parties that he attended, the law is enforced with considerable energy.

Again: I'm suggesting that while tax increases might reduce drinking, it ends up applying to everyone, and everyone isn't the problem.

This seems different from a cigarette tax in that the externalities we might hope to reduce (alcoholism, drunk driving, abuse, etc.) are far less predictable. The social drinker who has 5-6 drinks per night every Friday and Saturday is probably much less of a threat than the occasional binge drinker who drinks 12-15 drinks once every other month, but otherwise remains abstinent or limited to occasional wine consumption. The binge drinkers are less likely to be deterred, at the margin, but you'll be likely to see a cutback among the social drinkers who are generally healthy in their consumption patterns.

While I don't doubt the empirical findings, the distributive consequences--that is, who bears the tax burden--seems to penalize heavy, but responsible consumers. This isn't like a cigarette tax, where someone who smokes heavily, and at a steady rate, is much more likely to be a health threat and burden on society. The idea of a "responsible smoker" is less coherent than "responsible drinker." An alcohol tax would penalize equally, and if the tax proceeds went to fund social services, it would amount to a subsidy from the responsible drinkers for the treatment of the irresponsible ones.

This would kill the craft brewing movement. Many local breweries survive on razor thin profit margins. Increase the tax enough (less than you might think) and you'll drive dozens if not potentially hundreds of locally owned and operated business out of business.

Then we're back to the setup of mega (now international conglomos) corporations controlling the entire national beverage industry. Say goodbye to your IPAs and porters, you'll drink InBevBud, MolsonCoors, and BMCMiller and you'll LIKE IT.

As it turns out, the evidence that higher prices discourage alcohol consumption and abuse is strong...

Are you just trying to discourage abuse or are you trying to discourage general consumption?

What percentage of consumers are abusers?

It is not true that alcohol abusers as a group are so highly motivated to get their “fix” that price is no object.

Do the abusers just go without a fix or find alternative sources?

Doesn't first option undermine either their status as addicts or the current definition of addiction?

Also, for the record, alcohol isn't considered a "sin" by the "christian church", more just the Puritanical strain that is as American as the Pilgrims (who also drank beer).

Belgian monks make fine ales and lambics. Most of the great Chateaus in France got their start hundreds of years ago supplying local monasteries and churches with wine

Give strong drink unto him that is ready to perish, and wine unto those that be of heavy hearts.
-Proverbs 31:6

Drinking is not a sin. Being a Drunkard is.

Doesn't take much Google work to find that Medicare saves a ton of money by people drinking:

According to the study, during the five years, Medicare costs were $2,000 less for moderate wine drinkers--those who drank six to 13 glasses of wine per week--than for nondrinkers. The costs were even less for beer drinkers, with an average savings of $2,500. Moderate liquor drinkers also saved money, but only $1,200.

Light drinkers--those who consumed less than six units a week--also used Medicare less, with wine drinkers saving the government $300 per year more than nondrinkers. Light liquor and beer drinkers performed better, spending $800 and $1,800 less, respectively.

Given the relative size of the moderate drinker pool and the alcoholic pool, a cursory glance would suggest alcohol is providing a huge net benefit to society and health care expenditures. In fact, figuring out a way to tax non-drinkers would make more sense than taxing moderate drinkers.

"Why is one “sin tax” so popular politically, while another has been largely neglected?"

Because the propaganda effort of the anti-smoking forces have been successful in demonizing smoking and smokers. Some of these people exceed the worst caricature of Carrie Nation. They would enact tobacco prohibition if they could.

Also, and maybe more importantly, the percentage of the population that uses tobacco is much smaller than the percentage that uses alcohol. That's what really bothers me about so-called "sin taxes", it is the idea a lot of people have that it is perfectly OK with them to tax something they don't use or an activity they don't participate in.

Why should the virtuous be forced to bear the burden of the decadent?

I think for the same reason that gun control advocates insist on laws that hit everyone: the alternative is to admit that the problems of alcohol abuse and gun abuse are not evenly distributed, which would require focused enforcement on problem communities.

One of the reasons that many Native Alaskan villages have gone dry is that they recognize that they have an extraordinarily severe problem in their community.

Awesome-O: I am certain that, faced with the choice of either making god-awful wine, yeasty beer, and horrible moonshine that might blind you or cutting back on booze, all problem drinkers are going to go with the former. Because, you know, problem drinkers have time for that shit, and want to drink fermented oranges mixed with ketchup.

Obviously prisoners do, when their access to other forms of alcohol is shut off. And people not in the slammer have access to far more appetizing options than fermented oranges mixed with ketchup. Surely many problem drinkers would not produce their own alcohol, or buy on the black market from illicit producers. And surely at least some would. How many would? I don't know. My only point was that Mr. Cook didn't say a word about the possibility, and I hope he will will address it. I don't know a whole lot about economics, but I do remember that whenever you start talking about controlling demand for something through prices, you have to consider possible substitutes and black markets as part of the big picture.

How about "I'm a free man, do not try to control my actions."
Sin taxes should go away, entirely. The government is a terrible enforcer of morality, generally causing more problems than they solve. I'm not quite sure what it will take to convince people that the government should not be allowed the power to declare Thought Crimes, but I'm constantly amazed by the people who think it's a Great Idea.

"It is not true that alcohol abusers as a group are so highly motivated to get their “fix” that price is no object."

How about "I'm a free man, do not try to control my actions."
Sin taxes should go away, entirely. The government is a terrible enforcer of morality, generally causing more problems than they solve.

What you don't seem to be getting is that alcohol taxation to either discourage drinking or at least pay for the damage that its abuse causes, is not a "sin tax." It's a tax on a commodity with significant destructive externalities. American history is full of taxes, but generally, not taxes on sin. Adultery was a criminal offense (and still is in Idaho). Premarital sex was a criminal offense (and still is, in Idaho). Ditto for a lot of actions that were clearly considered sinful. But they were not taxed.

Alcohol, until the rise of the late 19th century's temperance movement, was never considered intrinsically sinful by Christians. The Bible is emphatic about the sinfulness of drunkenness, but not of alcohol.

That leaves only the poor who are the victims of this tax. Whatever it is that rich people do for fun, poor people obviously can't afford it.

While I agree that raising alcohol taxes will likely just take money out of a poor person's budget for luxuries like food, medical care, housing, gasoline, etc., let me also suggest that part of why poor people are a bit limited on what they can afford to do for fun is the amount of money that they spend on alcohol, DUI fines, bail, replacing furniture broken in drunken brawls, and all the rest of the "fun" that goes with alcohol abuse. We really need to be working a bit harder on discouraging these destructive choices. The alcohol abuse, while a direct cause of a lot of problems, is also a symptom. And yes, the analogy to the problem of violence and guns is quite strong.

"It is not true that alcohol abusers as a group are so highly motivated to get their “fix” that price is no object."

Cook might revise that view were he to spend some weeks studying real alcoholics.

Agreed. Those people with the biggest alcohol problems are prepared to give up everything: their careers; their families; their homes; their self-respect; their lives—to be able to drink. My brother-in-law has never let work get in the way of his alcohol, marijuana, and meth—and with predictable results.

Clayton,

I confess, I don't understand this joy about which you speak. I've been drunk once in my life, and why anyone would intentionally do that again utterly eludes me.

I think you perhaps missed where he says moderate drinkers? At least from my vantage point, drinking until drunk, no matter how infrequently one does so, pretty much takes a person out of the category of "moderate drinker".

"It's a tax on a commodity with significant destructive externalities."

But the output of externalities is not symmetrically distributed across the drinking population, nor do the externalities themselves strongly correlated to volume of consumption. The comparison to cigarette taxes is a dubious one.

What's the economic value of that "joy"? It's hard to measure, while the damage caused by abuse is easy to measure and all around us.

Okay, but "hard to measure" does not mean the same thing as "equal to zero." (I always feel like economists are making that mistake, though I'm probably being unfair.) That's why people are bringing up things like this, in fact: the poster has provided the results of some (apparently trustworthy) economic studies, so commenters are raising issues that are not, and maybe couldn't be, taken into account by those studies.

--i.e., give up libertarians, you can't win. We'll see about that. Meanwhile, working for liberty is its own reward.

I was responding to someone who - with salty language - insisted that Cook not be allowed to guest-blog here because he's not a minarchist, big-L Libertarian, or anarcho-whatzit.

My point is that in a democracy we're going to get the drug policy we deserve. If we pull a "screw you guys, I'm going home," we'll get bad policies. But if we actually discuss ways to respect liberty, keeping in mind that there aren't many libertarians, we might get a tax scheme for alcohol that discourages irresponsible use with minimal effects on responsible use.

For example, underage binge drinking doesn't happen in five-star French restaurants. So maybe we don't tax $300 bottles of wine the same way we tax retail sales of cheap vodka and beer.

If taxes are high enough that people are discouraged from buying alcohol containing beverages, would you not have to concurrently stop any home brew? How would this be different from Prohibition?

Home brew was not outlawed under prohibition. Only the commerce of alcohol was stopped, not individual production for one's own consumption.

Clayton Cramer:

Your historical perspectives on alchohol prohibition are missing one rather vital piece of information. The laws regarding alcohol were set up largely so the "lower classes" could not afford to drink, or drink as much. This was based on the notion that the lower classes were almost animals, who could not control themselves to any degree. The "upper classes", of course, were quite evolved, and drank only moderately, or at least did not display their drunkenness in public.

This issue is really more about a small group of egomaniacs conducting a holy war to ensure we the unwashed masses are virtuous, rather than any sort of public health campaign. that is just pretty rhetoric to dress up a miserable form of tyranny.

Only if you're plotting demand curves in an unconventional way and putting the dependent variable on the X-axis, which I guess you're free to do if you want.

That is the conventional way. Every other discipline may put the dependent variable on the x-axis, but the classic economic graph has P on the vertical and Q on the horizontal. Examples.

Patrick22:

Doesn't take much Google work to find that Medicare saves a ton of money by people drinking:

According to the study, during the five years, Medicare costs were $2,000 less for moderate wine drinkers--those who drank six to 13 glasses of wine per week--than for nondrinkers. The costs were even less for beer drinkers, with an average savings of $2,500. Moderate liquor drinkers also saved money, but only $1,200.

Light drinkers--those who consumed less than six units a week--also used Medicare less, with wine drinkers saving the government $300 per year more than nondrinkers. Light liquor and beer drinkers performed better, spending $800 and $1,800 less, respectively.

Of course, six 5 oz drinks a week runs you 1.2 750 ml bottles of wine. So about 61 bottles per year. Which may cost something like $10.00. So $610.00 a year, and $3050.00 over five years. Perhaps the drinkers could each just pay the $2,000 and pocket the $1050.00 instead? At the other end of the range, stopping drinking thirteen glasses of wine per week will put $4,650.00 in your pocket over five years. Strictly from those numbers we should ban drinking.

Hey, impose a stiff excise tax on soft drinks. That is unlikely to make the erstwhile soda drinker start drinking a six-pack a day, but might make him choose to have a beer instead of a large Coke with dinner now and then. ;)

Actually, I was hoping for a voucher. If I save Medicare $2K over 5 years drinking, then give me a $400/year voucher to buy alcohol.

If everyone got a $400/yr voucher good towards the purchase of alcohol, then non-drinkers and heavy drinkers would now be subsidizing moderate drinkers. Problem solved. Goodnight.

If we're looking at real-life examples as in this author's stated case of increased prices driving demand down for heavy drinkers, I'd have to disagree. Living in CA we have the CRV tax already attached to buying cans and beer to encourage recycling. Do a majority of people recycle more because of this tax? Doubtful. I think people recycle because they know it is good for the environment, etc. The tax is just a slight annoyance when rung up at the register, the majority of people are not affected by a little extra at the register, even heavy drinkers. I think that the case for the tax curbing alcohol use is fairly dumb because the tax would have to be astronomical to make that difference.

I think the issue should be looked at as groups that are more likely to get DUI's and other stated problems: <25 young adults. A problem adding a tax with this group is their lack of other expenses(mortgage payment, children) that would take precedent over going out and having a good time with friends. There is a strong social aspect to drinking, especially with this age group, that won't easily be curbed.

I'm not saying that I have a better solution to the taxation other than education and encouraging alternative transportation to avoid DUI's.

I think (but don't actually know) that the rule was different for beer and wine as opposed to distilled liquors.


The rule is still different. You can brew beer or make wine for personal use now up to a limit (which is never enforced) and buy all the equipment and consumables that you need on the Internet. It doesn't have to be sugar wine, either, you can make some tasty stuff if you adhere to a few simple rules about cleanliness.

Distilling without a license is illegal and for the most part much harder to do than brewing. It is also a lot harder to hide due to the odor. I lived in Nelson Co., KY for four years and know from personal experience. The citizens of Bardstown used to call it "the smell of money" as distilling drove the local economy.

Taxing (and yes, banning) alcohol leads to measurable public health improvements. That's indisputable.

Indisputable? It seems that Prohibition (banning) caused substantial negative impacts to many individuals. A certain Saint Valentine's Day in Chicago comes to mind. On top of that there are the problems of black market quality control, general acceptance of flouting the law, creation of criminal enterprises, police corruption, and diversion of public funds from health improvement activities to alcohol interdiction to name just a few.

Why not prohibit skiing? Certainly the lives saved would exceed the lives taken. And skiing imposes negative externalities, among other things, everyone's medical costs go up because of it. And who really needs to ski?

Why not prohibit skiing? Certainly the lives saved would exceed the lives taken. And skiing imposes negative externalities, among other things, everyone's medical costs go up because of it. And who really needs to ski?

That's the problem with any analysis that is as shallow as "we should adopt the set of laws that minimize [pick your negative consequence]". You can apply the same rationale to all junk food, many sports (certainly marathon running, mountain biking, football, basketball, hockey and boxing) and many other types of recreational activities (skiing, ice skating, fishing, hunting, driving, etc.). When you start from the flawed premise that people agree that reducing alcohol related problems means you can take any actions necessary to reduce those problems (including Cook's pseudo-prohibitionary taxes), you're going to end up with conclusions that flow from that flawed premise and strike most reasonable people as ridiculous.

By the way, since when is 5 drinks over a couple hours binge drinking? Where I come from, that's barely a good start.

Say goodbye to your IPAs and porters, you'll drink InBevBud, MolsonCoors, and BMCMiller and you'll LIKE IT.

Or go back to what I did a couple of decades ago, before the rise of craft breweries - brew my own.

To add a little bit of data, from dim memory, brewing your own was at least as cheap as buying Bud or whatever, and not a lot of trouble. The effort was per batch, not per gallon - making a gallon or ten gallons was basically the same effort. For me, one of the downsides was that I ended up with way more than I wanted to drink.

Imagine what our society would be like if we permitted the use of force in cases where it is statistically likely to save more lives than it would take. Seriously, imagine it fully. Do you want to live in that world?

No, I want to live in a world where good ends cannot justify intrinsically evil means - one that does not contain this erstaz deontology.

Taxation of alcohol is not intrinsically evil. It may be a step in a chain of causation that results in someone dying, but not without the intervening act of a free moral agent.

Murder, however, is intrinsically evil, and can never be justifed based on the good it would cause.

From the original article

Unfortunately the preconception that leads to skepticism in this area is false. It is not true that alcohol abusers as a group are so highly motivated to get their “fix” that price is no object.

I would note that if someone was motivated to get their fix, the tax-free amount that can be produced (assuming a 1-adult household. For more than one, limits go to 200 gallons)

100 gallons of wine (say 10-12% abv)
plus
100 gallons of sake or similar high alcohol malt liquor (10-12% abv)
plus
cider (exempt from wine taxes under IRS tax code)

I can't find a legal definition of wine in the tax code, except that it does not include cider. Does it include mead and similar fermented beverages?

The fact is that if you really want to abuse alcohol, you can make enough of it to really cut down on the cost....

Note that state laws may impose limits of home brewing, and the above is not a federal home-brew limit, but a tax-exempt limit.

Setting aside the statism issue, how can anyone in good faith advocate such a horribly regressive tax system as this? The rich will be unaffected by doubled wine costs, while the poor are severely burdened. Is the assumption (as somesense noted at 12:51) that only the poor need to be restricted in their alcohol because they lack some basic moral self regulation?

If the goal were to reduce alcohol consumption, wouldn't the proper recourse be to impose an alcohol rationing scheme? Or how about imposing a flat ban on .05 alcohol levels in all public places? That would certainly fit with the "OMG, 5 beers is teh devil binge drinking!" mentality of the freakin' ivy league pansies enacting our laws.

But no, the goal is NOT really to reduce alcohol consumption. The goal is just to reduce the alcohol consumption of "those people." This is sick, and illiberal in every sense of the word.

Then we can't have any police forces, either, because whatever the benefit in lives saved, once in a while a cop is going to shoot someone.

The justification for the police force is that they respond to force with force. You would be correct if the only justification was that there was a net savings of life.

Nor can we have fire departments, because no matter how many lives they save, once in a while a fire truck will hit a car in an intersection killing its occupants.

The car accidents also are not justified by the lives saved. The accidents are simply the accidental results of any activity. I can drive to 7-11 just because I'm thirsty even though I risk killing someone. I don't need a moral calculus to justify it. If you don't want to take the statistical risk of a car accident, you can stay off the road, but we have all agreed to accept that risk.

By the way, there was an aircraft liability case that proceeded on exactly this theory. The guy flew for no reason (he just felt like it) and the additional load he placed on the air traffic control system prevented a controller from doing something he wasn't required to do but would probably have done had the load been lower. This would have averted an accident. As a result, a pilot was found liable for an aircraft accident despite having broken no rules and not being directly involved in the accident at all.

The bizarre result in this suit was the result of precisely this kind of moral calculus which, again, I utterly reject. You *cannot* weigh lives taken against lives saved, except when other people force you to -- in which case, you are simply minimizing the lives *they* take.

We can't have any paramedics, because no matter how many lives they save, they'll eventually administer the wrong drug and kill the patient.

Right, but they operate on people who consent. They couldn't operate without consent even if they did have the type of moral calculus argument you make. (And, in some cases, we reasonably assume the recipient would have consented because we we have no better choice.)

The difference is -- your only justification is the moral calculus. You have no other. You aren't responding to force. You aren't doing what you want with what is yours. You weren't putting others who consent at risk.

And the moral calculus argument simply doesn't wash. You can't kill one person to save three.

Otherwise, why not ban skiing?

Taxation of alcohol is not intrinsically evil.

Using State power to discourage people from taking actions that reduce their health risks is intrinsically evil. It's as evil as taxing penicillin.

It may be a step in a chain of causation that results in someone dying, but not without the intervening act of a free moral agent.

Sure, no law can harm people unless people follow or enforce it.

Governments simply cannot justify their coercive actions with a moral "saves more than it kills" calculus. That's simply not a justification for the use of force.

Perhaps giving some incentive to sell breathalysers at liquor stores would help acquaint people with when they were drinking to the point of 'negative externalities.'

Be careful what you wish for. Most people I know that own breathalyzers merely use them to impress/compete with their friends.

Note that state laws may impose limits of home brewing, and the above is not a federal home-brew limit, but a tax-exempt limit.

Whether they do or don't, it's largely irrelevant as it's almost impossible to police. Making cider requires little more than apples, a container and a place to store it in your basement. Maybe the DEA can start tracking apple sales.

Whether they do or don't, it's largely irrelevant as it's almost impossible to police. Making cider requires little more than apples, a container and a place to store it in your basement. Maybe the DEA can start tracking apple sales.

Above the 100-200 gallon limit, it becomes federal tax evasion. However, my main point is that state law could make it harder to produce reasonable-quality alcoholic beverages in the comfort of your own home. FOr example, I don't know of many home-brewer stores in Utah.

In theory making low-grade beer just requires grain, water, a yeast, bittering herbs, and a place to store it. In practice, I dont know anyone who malts their own grains (but hey, I have thought about trying it).

Also the question of state laws is an interesting one and calls into question the culture towards alcohol vs the actual regulation. I am not at all certain that state laws have much of an effect. For example, I have been homebrewing since I was 16. Until I went to college, I couldn't find any WA State or Federal law I was violating. One I left the house it became illegal for me to continue. I didn't care about the law and continued to brew. Not that I was drinking heavily (I probably drank LESS than any of my friends).

In theory making low-grade beer just requires grain, water, a yeast, bittering herbs, and a place to store it. In practice, I dont know anyone who malts their own grains (but hey, I have thought about trying it).

I don't make my own beer because I can buy a case of Fudd at the local Kwik-E-Mart for $10.99. If I couldn't, I, like my great-grandmother 80 years ago, would brew my own.

If you really want to get into reducing alcohol consumption, simply legalize marijuana. Some portion of the alcohol consuming population will switch to pot. No cirrhosis, no beating up spouses for that group. Abuse of marijuana is much less dangerous to the individual and those around him/her than is abuse of alcohol.

That way, you can reduce the damage (if that's the real reason for this desire), while avoiding meddling with those whose use of either drug is responsible.

Homer no function beer well without.

This entire article is anti-liberty, social engineering bullshit. I have no idea why this fascist is posting here.

The Founders were fascists then!

The single article of ardent spirits, under federal regulation, might be made to furnish a considerable revenue. ...That article would well bear this rate of duty; and if it should tend to diminish the consumption of it, such an effect would be equally favorable to the agriculture, to the economy, to the morals, and to the health of the society. (Federalist No. 12)

OTOH, if George Washington could make whiskey, why can't I?

As George Washington himself put it, distilled spirits are "the ruin of half the workmen in this Country." So, be prepared to pay a tax on each gallon that you distill, and a higher tax rate will be levied on those of you rabble-rousing small distillers.

It's true that GW recognized inherent problems with alcohol and gambling. But he still, interestingly, drank and gambled.

[I didn't delete this comment because it had been responded to, but I've banned the commenter. Part of it is a perfectly fine substantive criticism, but the first and the last paragraphs (especially the last) are arrays of personal insults of the sort that I don't want on this blog. Commenters who don't like our comment policy can go insult our guests (or us or others) elsewhere. -EV]

Using taxation to attempt to control behavior is inherently evil. Dr Cook is thus inherently evil.

The shocking thing is that he is maniacally focused on the costs of alcohol. He seems to be the Al Gore of tasty fermented beverages, and his research has just as much quality and integrity (i.e. none).

You don't have to go back to Prohibition to find examples of taxation levels reduced dramatically to save lives and costs, despite the clamorings of public health fascists. Canada in the 90s had stupendous increases in cigarette prices. This lead to SERIOUS smuggling, helped by the presence of the US and several border indian reservations, most prominently in the vicinity of Cornwall, Ontario.

This smuggling got very violent, very quickly. Smuggled cigarettes became a huge business. An agreement between the Canadian government and tobacco companies was signed in July of 08 that settled tax claims in return for $1.2B in fines, and it is claimed that one company in the year after taxes were raised in 91 earned $600M from facilitating smuggling. Activists claim that 1/3rd of cigarettes in Canada during the period were smuggled.

Increasing taxes to achieve substantial reductions in consumption will also dramatically increase enforcement costs and do substantial damage to a country's integrity. Taxes like this increase the profits of smuggling, increase the presence of organized crime, and dramatically increase the frequency of bribery. Despite all libertarian arguments against government (which I wholly subscribe to) the most compelling argument against extending government powers and revenues is that they inherently lead to corruption and the destruction of the state. Punitively taxing minor luxuries for public health gains has a long history and an equally storied litany of failure.

In other words, be off to the 18th century, the 2nd century BC, or to any other benighted time that suffered malicious creatures like you, Prof Cook. You are a species of vile character that always crops up despite your inability to achieve your aims. Your kind of sophistry has ushered in every tyrannical regime, from the Bolsheviks to Blagojevich. You are a knave, a despicable creature, and have not a jot of intellect or integrity in your body, not to mention completely lacking anything resembling a soul.

You are a knave, a despicable creature, and have not a jot of intellect or integrity in your body, not to mention completely lacking anything resembling a soul.

That doesn't seem to be consistent with the comment policy, and hardly creates an inviting atmosphere for guest bloggers.

Canada in the 90s had stupendous increases in cigarette prices. This lead to SERIOUS smuggling, helped by the presence of the US and several border indian reservations, most prominently in the vicinity of Cornwall, Ontario.

Even if true, all that demonstrates is that government should not pass "stupendous increases" in taxes.

Perseus:

As George Washington himself put it, distilled spirits are "the ruin of half the workmen in this Country." So, be prepared to pay a tax on each gallon that you distill, and a higher tax rate will be levied on those of you rabble-rousing small distillers.

ATF rules make it MUCH harder to be a small distiller than it was in Washington's time.

Personally I think there should be a simple moonshiner's license at a fee of something like $300 per year with reduced facilities and testing requirements, but the restriction that the spirits cannot be sold. I don't object to paying a resonable tax even if it were to come out to be $60/gallon. I do object to onerous requirements that make it impractical to even try.

Congress will not raise prices by 10$ a fifth (that's 750ml in 2008) because their constituents would throw their mangy asses out of office next chance they got. I know it would affect my vote. The States are completely free to raise or lower alcohol taxes on their own, that they haven't, even in times when budgets are squeezed surely speaks to the simple fact that it would be very unpopular with voters.

Not to mention the fact that Congressmen themselves are not as a class teetotalers, and raising taxes that much would affect their own pocketbooks when and if they ever buy their own alcohol.

Way too many guest bloggers think this is just a classroom or other academic setting where they can just spout their drivel, no matter how tedious and poorly reasoned, completely unopposed.

Given the absolute lack of scholarship behind the opposing comments, I'd have to say that so far he is completely unopposed.

By the way, since when is 5 drinks over a couple hours binge drinking? Where I come from, that's barely a good start.

This is someone who is in no position to intelligently discuss the social costs associated with alcohol misuse. Indeed, several of the commenters here have made remarks that suggest that they have an need for intoxicants above and beyond just getting some "joy."

Nobody's making the argument that we need to increase taxes to compensate for the harms caused by alcohol (or that the funds raised through such taxes will actually go to do so). A tax done merely to try and decrease the amount of a good consumed is a sin tax.

Uh, that's what Cook is EXACTLY arguing for. I don't agree with his approach, but you have utterly misread his argument. Your definition of "sin tax" leaves much to be desired in terms of consistency and applicability. Is the $200 NFA tax a "sin tax"? No. It was passed to discourage private ownership of machine guns, not because they were "sinful" (there are no machine gun bans in the Bible) but because Congress believed that there was a serious misuse of machine guns problem, and wanted to discourage them.

As for calling me a "wallflower": not really. But the difference is that I don't need to get buzzed to have a good time at a party.

Without entering the debate on the propriety or sizing of alcohol taxes, I would suggest that NO TAX be indexed to inflation.

This would be perhaps the only incentive in the entire government to not debase our currency (we now call it inflation, since we aren't actually adding base metals to our coins - oh wait, we did that...).

I'd like more of these.

Also, for the record, alcohol isn't considered a "sin" by the "christian church", more just the Puritanical strain that is as American as the Pilgrims (who also drank beer).

Jesus not only drank wine (untreated water in those days was even more dangerous to drink than wine), he made it--turning water into wine at Cana. Water could (still can) be effectively treated by adding a little wine (the alcohol kills the microbes), as people have done for thousands of years. The Founders liked to drink--Jefferson preferred table wine, Adams Madeira. Why one strain of Fundamentalist Christianity has labeled it a sin, like playing cards or dancing, I can't understand. A Puritan is a person who suspects that somewhere, someone is having a good time, and he is determined to put a stop to it.

Drunkeness is a problem--the moderate use of alcohol isn't.

In fact, since you go on to say a bit later "Professor Cook is targeting immoderate behavior with proposals that affect all behavior", it really sounds to me like your area of agreement with autolykos is fairly substantial.

Indeed. But what I find fascinating is the emotional reaction that some of the drinkers (and pot smokers) get when you point out what should be blindingly obvious: there are negative externalities to the abuse of these drugs. I can disagree with Professor Cook about the best strategy for solving this problem, and still agree with him that there is a serious problem.

Well that's the issue. For some reason, Cook isn't assigning any value to the substantial joy moderate drinkers get from consuming alcohol. The calculus isn't simply "what policy/level of tax will reduce in the least number of robberies/rapes/DUIs/etc" (that policy is almost certainly prohibition, even with the black markets that develop). You have to balance that benefit against the loss of social utility associated with the policy. Chianti-sippers like Cook don't understand that because they assign little to no utility to alcohol consumption.

I wonder if Professor Cook had a hangover in grad school the day they tought the "benefit" side of cost-benefit analysis. His book on Cost of Gun Violence has a similar problem. He seems to spend a lot of effort trying to tally up "costs" of certain products he does not like, without any attempt to figure out a complete estimate of the total benefit of the product (consumer surplus, postitive externalities.)

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