|Health Factors:||Alcohol & Drug Use|
|Decision Makers:||Local Government State Government|
|Population Reach:||50-99% of WI's population|
|Impact on Disparities:|
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Alcohol taxes are usually based on the amount of beverage purchased, not on the sales price, so effects can erode over time due to inflation if taxes are not adjusted regularly. Such taxes are implemented at the state and federal level, and differ for beer, wine, and liquor (CG-Alcohol).
There is strong evidence that alcohol taxes and other policies that raise the price of alcohol reduce excessive alcohol consumption and related harms (CG-Alcohol, Wagenaar 2009, Wagenaar 2010). Overall alcohol consumption decreases when alcohol prices increase; effects have been shown for beer, wine, and spirits (CG-Alcohol, Wagenaar 2009). Higher alcohol prices are also associated with lower levels of drinking among high school and college-age youth (CG-Alcohol). Public health effects are expected to be proportional to the size of the tax increase (CG-Alcohol).
Higher alcohol prices reduce alcohol-related harms such as: motor vehicle crashes and fatalities; alcohol-impaired driving; and mortality from liver cirrhosis. Higher prices may also reduce violence, sexually transmitted infections (STIs), and alcohol dependence (CG-Alcohol).
A 2004 Institute of Medicine report recommends placing top priority on beer taxes and indexing excise tax rates for all alcoholic beverages to the consumer price index so that they keep pace with inflation without further legislative action (IOM-Underage drinking 2004).
Alcohol tax rates vary by state and by type of alcohol. As of January, 2014, state sales taxes ranged from $2.00 (MO) to $35.22 (WA) per gallon of spirits, $0.11 (LA) to $2.50 (AK) per gallon of wine, and $0.019 (WY) to $1.17 (TN) per gallon of beer (Tax Foundation-Sales tax 2014).
Wisconsin’s beer tax of $2.00 per barrel was established in 1969 (WI LFB-Alcohol and tobacco 2009). Wisconsin has one of lowest beer taxes in the country, only Wyoming’s rate is lower. Eleven states have lower rates than Wisconsin for alcohol overall—beer, wine, and liquor (Tax Foundation-Sales tax 2014).
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