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Perspectives on Alcohol Taxation
Donald Kenkel1, Willard Manning1
1Donald Kenkel, Ph.D., is an associate professor in the Department of Consumer Economics and Housing, Cornell University, Ithaca, New York. Willard Manning, Ph.D., is a professor in the Institute for Health Services Research, School of Public Health, University of Minnesota, Minneapolis, Minnesota.
Abstract:
The issue of alcohol taxation can be viewed from several angles: public health, revenue generation, economic efficiency, fairness, and effects on employment. Conclusions about when an alcohol tax increase is appropriate or effective-or by how much a tax should be increased-differ widely, however, depending on which of these perspectives is taken. Policymakers trying to find a balance among the different perspectives must weigh the multiple trade-offs involved when a tax increase is proposed. Considerations include how different drinking populations respond to tax-induced higher alcohol prices, the equity of a tax for all members of society, and the effects of displacement for workers in alcohol-related industries.
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