Neo-Prohibitionists are Alive and Well

Taxing alcohol will save us from all sorts of ills, or so many would have you believe. Here's a quote that got my attention this past week:

 "Returning alcohol taxes to their 1977 levels (when the government collected $57 in 2009 dollars per gallon of alcohol) would raise an additional $18.5 billion in revenue across all levels of government -- and also lead to reductions in drunk driving, violent crime and disease."

But things aren't always what they seem. Remember the recently concussed CARE Act? ..... "To keep your kids and communities safe." Somehow I don't think that bill was about our kids or communities. I know, call me a cynic.

Twenty years ago give or take, we had a spate of neo-prohibitionists canvasing the wine business, some well intended with positive agenda's like MADD whose sole focus was to reduce deaths and maimings by drunk drivers. Others flaunted a religious anti-alcohol bias. Some focused on health as well as the costs and damage alcohol abuse can cause families and communities. Governments decided it was a safe way to raise taxes and not irritate their constituents. Wholesalers simply tried to hold on to their monopoly and funded congressional and state campaign coffers to make sure that happened. It was a strange group of bedfellow aligning the Dry Religious Right with Wholesalers and the Government.

This past week I found the above citation in what seemed like a curious article to me. It was a flashback; a return to the neo-prohibitionist days of 20 years ago: Start with the premise that alcohol is bad, and then back into an argument abusing logic along the way.

Taking a small article from NPR that noted we spend more in bars then we do at home versus 30 years ago, the author of that article went on to talk about the reduction in real taxes that has caused:

"In 2009, the federal, state and local governments collected $25 in excise taxes per gallon of alcohol. (That’s not total beverage volume, but alcohol volume; for example, there’s one gallon of alcohol in 20 gallons of typical mass-market beer.) In 1982, that figure was $35, measured in 2009 dollars, a decline of 29 percent."

 My B.S. meter was now piqued since I don't spend inflation adjusted dollars. I spend real dollars.

"It makes sense that these policy shifts would push alcohol prices down at the store and up at the bar. But it doesn’t make sense that such policy shifts happened in the first place."

Now we are in full bore BS mode. The author who is a taxation expert at the Manhattan Institute (I don't know what their agenda really is), has made a leap in logic first deciding that there's a policy shift at all, and that caused more money being spent in bars versus homes, and second that less alcohol by volume is consumed now leading to a reduction in inflation adjusted tax revenue. Offering no support that a policy shift has caused the change in behavior, I feel justified to offer an equally unsupported but more rational opinion: How about in the past 30 years the American consumer has opted more for convenience, eats out more often, and as a consequence, spends more in bars and I'd add by the math since the report says we still spend the same amount on alcohol, drinks less volume of alcohol than 30 years ago. Further, I'd suggest consumers are paying more for alcohol on a real dollar basis as a result of the premiumization of the product. But nonetheless, with broken logic the article's author concludes the argument with:

"....and (higher taxes on alcohol will) also lead to reductions in drunk driving, violent crime and disease."

So there you go. We can balance the budget by raising regressive taxes on alcohol and at the same time, save everyone from all sorts of crime and disease. Funny thing is, Prohibition showed that trying to eliminate alcohol only caused more crime, and the weight of medical research suggests that wine and some level of alcohol use in moderation is more healthy for most than not.

But one thing is clear: Neo-prohibitionism may be less visible, yet the underlying agglomeration of strange bedfellows isn't yet dead.