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Alcohol excise tax

Health Factors: Alcohol & Drug Use
Decision Makers: Local Government State Government
Evidence Rating: Scientifically Supported
Population Reach: 50-99% of WI's population
Impact on Disparities: No impact on disparities likely

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Description

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).

Expected Beneficial Outcomes

Reduced excessive drinking
Reduced alcohol-related harms
Reduced underage drinking
Improved health outcomes
Reduced violence
Reduced incidence of STIs

Evidence of Effectiveness

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).

Implementation

United States

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

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).

Implementation Resources

APIS - Alcohol Policy Information System (APIS). Welcome to the Alcohol Policy Information System. Accessed on December 1, 2015
CSPI-Alcohol taxes 1996 - Center for Science in the Public Interest (CSPI). State alcohol taxes & health: A citizen’s action guide. Washington, DC: Center for Science in the Public Interest (CSPI); 1996. Accessed on December 10, 2015

Citations - Description

CG-Alcohol - The Guide to Community Preventive Services (The Community Guide). Excessive alcohol consumption. Accessed on December 19, 2016

Citations - Evidence

CG-Alcohol - The Guide to Community Preventive Services (The Community Guide). Excessive alcohol consumption. Accessed on December 19, 2016
IOM-Underage drinking 2004 - Institute of Medicine (IOM), National Research Council (NRC), Committee on Developing a Strategy to Reduce and Prevent Underage Drinking, Board on Children, Youth, and Families (BCYF). Reducing underage drinking: A collective responsibility. (Bonnie RJ, O’Connell ME, eds.). Washington, DC: National Academies Press; 2004. Accessed on February 24, 2016
Wagenaar 2009* - Wagenaar AC, Salois MJ, Komro KA. Effects of beverage alcohol price and tax levels on drinking: A meta-analysis of 1003 estimates from 112 studies. Addiction. 2009;104(2):179-90. Accessed on November 9, 2015
Wagenaar 2010 - Wagenaar AC, Tobler AL, Komro KA. Effects of alcohol tax and price policies on morbidity and mortality: A systematic review. American Journal of Public Health. 2010;100(11):2270-8. Accessed on November 9, 2015

Citations - Implementation

Tax Foundation-Sales tax 2014 - Tax Foundation. State sales, gasoline, cigarette, and alcohol tax rates by state, 2000-2014. Accessed on March 4, 2016
WI LFB-Alcohol and tobacco 2009 - Moran S. Alcohol and tobacco taxes. Madison: Wisconsin Legislative Fiscal Bureau (WI LFB); 2009. Accessed on November 17, 2015

Page Last Updated

August 6, 2015

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