Watch for Taxation on Wine!

Wine & Spirits Daily
April 17, 2009
Researcher Blasts CA's Dime a Drink Tax

Dear Client:

After successful lobbying from The Wine Institute and other trade groups prompted California lawmakers to drop the controversial nickel-a-drink tax last month, state assemblyman Jim Beall Jr. has introduced a bill that would raise state alcohol taxes by a dime a drink. According to him, "The alcohol industry creates devastating problems - traffic accidents, alcoholism - and walks away with money stuffed in its pockets while the public - including nondrinkers - are left to pay billions for the mess." As usual, it's leaders like Beall that refuse to credit the alcohol industry for all the effort and money it invests in curbing underage drinking and alcohol abuse. Instead, they are more interested in pushing their own agenda and prying tax dollars from Americans who are overwhelmingly moderate and responsible drinkers.


In a local California newspaper paper, a professor heading the Reason Foundation said the assemblyman's claim that the alcohol industry creates problems "is false" according to his own research. In fact, affluent and successful people are more likely to drink. His 2006 study found that drinkers earn 10% to 14% more money than nondrinkers. Men who drink socially, visiting a bar at least once a month, bring home an additional 7% in pay.



A 2005 study sponsored by the National Institute for Alcoholism and Alcohol Abuse similarly found that drinking actually increased the returns to both education and work experience. And a 2001 study, "The Impact of Problem Drinking on Employment," found that even "problem drinking is not negatively related to labor supply," writes Professor Edward Stringham in the OC Register.



Furthermore, research indicates that only one-third of violent crimes involve alcohol, although The Marin Institute says $8 billion in annual costs to taxpayers stem from alcohol-related crime.



Finally, he ends the article by rightly claiming "the overwhelming majority of people who consume alcohol do so responsibly." Heavy drinkers do not curb their drinking in response to higher prices. Instead, it is light-to-moderate drinkers who are affected. "If alcohol abusers are truly addicted, will an extra 'dime a drink' stop them? Will a career criminal decide to not get drunk before his next crime spree because of a 10-cent-per-drink tax? Of course not."