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Comment
. 2018 Jan;79(1):43-48.
doi: 10.15288/jsad.2018.79.43.

Erosion of State Alcohol Excise Taxes in the United States

Timothy S Naimi  1   2 , Jason G Blanchette  1 , Ziming Xuan  2 , Francis J Chaloupka  3
Affiliations
Comment

Erosion of State Alcohol Excise Taxes in the United States

Timothy S Naimi et al. J Stud Alcohol Drugs. 2018 Jan.

Abstract

Objective: In the United States, excessive alcohol consumption is responsible for 88,000 deaths annually and cost $249 billion, or $2.05 per drink, in 2010. Specific excise taxes, the predominant form of alcohol taxation in the United States, are based on the volume of alcohol sold rather than a percentage of price and can thus degrade over time because of inflation. The objective of this study was to describe changes in inflation-adjusted state alcohol excise taxes on a beverage-specific basis.

Method: State-level data on specific excise taxes were obtained from the Alcohol Policy Information System and the Tax Foundation. Excise tax rates were converted into the tax per standard U.S. drink (14 g of ethanol) for beer, wine, and distilled spirits, and converted into 2015 dollars using annual Consumer Price Index data.

Results: Across U.S. states, the average state alcohol excise tax per drink in 2015 was $0.03 for beer, $0.05 for distilled spirits, and $0.03 for wine. From 1991 to 2015, the average inflation-adjusted (in 2015 dollars) state alcohol excise tax rate declined 30% for beer, 32% for distilled spirits, and 27% for wine. Percentage declines in state excise taxes since their inception were more than twice as large as those from 1991 to 2015.

Conclusions: In 2015, average state specific excise taxes were $0.05 or less per standard drink across all beverage types and have experienced substantial inflation-adjusted declines.

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Figures

Figure 1.
Figure 1.
Average U.S. state alcohol specific excise tax rates per standard drink, inflation adjusted to 2015 dollars, by beverage type, 1991–2015. The analysis includes all 50 U.S. states for beer and 32 states for distilled spirits and wine (the 32 states without any state monopoly on wholesale distribution or retail sales of either distilled spirits or wine). A standard drink in the United States is 14 g of ethanol, which is equivalent to 12 oz. of 5% alcohol-by-volume beer, 1.5 oz. of 40% alcohol-by-volume distilled spirits, or 5 oz. of 12% alcohol-by-volume wine.
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