Maryland Alcohol Tax Reducing Sales & Consumption
According to the John Hopkins University Bloomberg School of Public Health, research reveals that the 2011 increase in Maryland Alcohol Tax (2011) has resulted in the reduction on sales in beer, wine, and spirits. This also then suggests a decrease in alcohol use overall, as alcohol sales figures are most often used to estimate alcohol consumption.
The study was led by the Center on Alcohol Marketing and Youth (CAMY), and may be the first to analyze the impact of tax on alcohol sales for different types of beverages. It agrees with some earlier studies which suggested that excise taxes (which are included in the price) on alcohol can result in a sales decrease and thus, a reduction in consumption. The study was published in the American Journal of Drug and Alcohol Abuse.
- Sales of liquor (spirits) were reduced by 5.1%
- Sales of beer were reduced by 3.2%.
- Sales of wine were reduced by 2.5%.
In 2011, Maryland alcohol tax increased from 6%-9%, and is now associated with a 3.8% reduction in overall alcohol sales, when compared to expectations sans the tax increase.
It is estimated that every year in the U.S., 88,000 deaths are related to alcohol. And yes, alcohol is generally more affordable to the average consumer than it has been in decades.
Additionally, alcohol consumption was estimated to have cost the U.S. $249 billion in 2010. In Maryland, alcohol use is thought responsible for over 1,300 deaths per year. In 2010, it cost the state nearly $5 billion.
The Study and Implications
In the study, alcohol sales in all 24 counties were compared between the 18-month periods before and after the Maryland alcohol tax went into effect.
Changing prices has been known to cause fluctuations in consumer behavior. Sales tax is a percentage of the sale price, so the more expensive the item, the greater the tax incurred. This makes sense in terms of the outcome – cheaper alcohol, such as beer and wine, resulted in less decreases than liquor, which is usually more expensive.
The Task Force on Community Preventive Services also contends that increasing taxes on alcohol can be an effective approach for harm reduction. Many studies have revealed that when alcohol consumption decreases, so do other negative health and social problems related to alcohol abuse. Therefore, one may expect to see a decrease in violent crime, injury due to alcohol use, drunk driving cases – you name it.
Price goes up, demand goes down. That’s Economics 101. The law of demand states that, all else being equal, as the price of a product increases, the quantity demanded falls.
If the supply decreases, however, and the demand remains the same, there will be a shortage, and the price will increase. Thus, the demand will then decrease. So why not skip the middle man and just raise the price? I’m no economics expert, by any means, but this simple and well-accepted logic makes sense to me.
Alcohol is legal, so there’s real reason to mess with supply. In addition to education, treatment, and prevention, it’s probably one of the better means available to reduce the harm caused by excessive alcohol consumption.
~ G. Nathalee Serrels, M.A., Psychology
If you or a loved one is struggling with addiction
“We Believe” Recovery is Possible for Everyone!
Please contact us today!
Oops! We could not locate your form.