Don’t have a lot of brainy stuff to add but I like that Matt references Kleinen and wish he would have done a deeper take on Kleinens criticism of our lack of alcohol regulations. I was persuaded by his illustrations of how much the alcohol industry is dependent on alcoholism, how your average neighborhood bar needs the neighborhood drunks and caters to them, how most of the advertising revenue in booze centers on the cheapest lowest quality stuff partly because that’s what alcoholics prefer, how there is a huge incentive to get people to drink as young as possible and this pervades advertising patterns and ought to be redirected away from young people through regulation. Simply his stat of x percent of alcohol is consumed by y percent of people, x being surprisingly big and y being surprisingly small was eye opening. I drink, but alcohol is bad and we shouldn’t be so skiddish about regulating it and taxing it to minimize its harms.
I think there is little widespread recognition of just how much some people drink. If you have a beer after work every day and then like 5 drinks on friday and saturday you are definitely drinking too much per health recommendations, that's drinking too much per health recs. The type of person who does that probably is thinking "I drink too much but raising the price of a beer by .25 cents would make no difference.
BUT apparently about 75% of the alcohol is consumed by the 10% of people who consume more than the person above. Someone who drinks 10+ drinks a day would surely have their consumption curtailed by a price hike of 25 cents per beer --we're talking about like 1,000/year. And surely it's in this area where you also see a disproportionate share of liquor related deaths. If I remember correctly even for drunk driving the lions share of deaths are from people who are at ~.15 BAC or higher which is very, very drunk.
Some states make it harder to by alcohol than others. In Maryland, for example, you can only buy liquor at what are essentially state-run dispensaries, while in Wisconsin it's available at gas stations. I wonder if there's any evidence of what effect if any those differences have.
As a heavy drinker with disposable income, this wouldn't deter me. It didn't when I lived in Stockholm where prices are nearly double. Let's call that "lived experience" rather than anecdote for more credibility.
To some extent the spirits tax premium is working as intended; it's harder to get acute alcohol poisoning from hard seltzer than straight liquor, so the tax on spirits is higher to reflect its higher negative externalities. We'd probably want keep a pattern like that as we raise taxes.
One thing I find funny in the US is the perseverance of this puritanical streak in the culture and how it affects things like drinking. This is purely anecdotal, but it always seemed to me that the more prevalent the conservatism is in a society when it comes to alcohol, the higher the percentage of risky drinking behavior is relative to total alcohol consumption.
This is almost the antithesis of what Matt is advocating for (and I agree with him, for the record) but what earthly reason is there to have the legal drinking age set at 21?
I'm not sure alcohol consumption is as price elastic as the article infers it is. We have Prohibition as a case study in the extreme. And alcohol purchases conform to the 80/20 rule in that 20% of the customers account for at least 80% of sales (I can't find the exact statistics, but they are startling) which means that compulsive, if not addicted, customers are the core of the industry.
The cost benefit ratio of sin taxes is always complicated. For one, it gives government a financial incentive. Privatizing liquor sales where they are state controlled is always steeped in revenue loss arguments. Also the beneficial health effects of decreasing alcohol consumption would increase government health costs as lives are extended. A grim trade-off but one that has kept tobacco taxes from becoming even more punitive.
Finally, alcohol taxes are based on volume of alcohol not price, which adds to the regressiveness of those taxes since a bottle of Blantons is taxed as much as rotgut whiskey. So it's all more complex than just raising taxes on booze, which is still not a terrible idea.
Strong nanny state vibes on this one. Part of being a free human being with agency is being able to make bad choices. There are plenty of things that are good for people what we don’t compel or incentivize through taxation/subsidy.
Can you please write an article about something we should tax LESS? The persistent theme here is, "we spent $1MM here, but we should have spent $1B there." Is there a thing you don't want to tax?
I simply don't believe that heavy drinkers can be so easily dissuaded from drinking, and forcing light/moderate drinkers to cut back for some vague minor public health benefits is the definition of nanny state. Heavy drinkers are addicts, and we have tons of info about how addicts behave if you make it more difficult to get their fix! They can homebrew or make bathtub/prison booze, they can drink rubbing alcohol or cologne (met a woman from Iran who told me people did this in her country), and of course they can establish a black market. There's a black market in cigarettes for God's sake!
And the politics of it are awful- big Bloomberg soda tax energy, which I don't recall as being particularly successful or popular. Especially coming from the Dems, who already have a nanny state reputation
Moderate drinker here but I think Matt is right about this. Anecdatally, I know a quite a few people who drink to the extent that it interferes with their day-to-day lives, often significantly, and my understanding is that many non-crime social issues are also greatly exacerbated by/widely attributable to alcohol abuse.
My maternal grandfather was a hardcore alcoholic, which stressed the family considerably, especially my mother (the youngest of a large Irish brood), who often had to pick up the pieces since her mother was often disabled with rheumatoid arthritis. I consider myself lucky to be a lightweight and extremely hangover-prone.
"Certain things have seen their prices rise much faster than the rate of overall inflation — that’s normally labor-intensive services like child care and education. Other things, mostly related to computers, have gotten much cheaper. Alcoholic beverages are about average."
So, the alcohol moderates the rise in the total cost of college professors who drink a lot. A classic case of the Baumoholic Cost Disease.
There may be a strong pushback with legitimate consistency arguments from the libertarian left/right/whatever backed by the alcohol lobby if more alcohol taxes/regulations coming at a time of marijuana legalization.
For instance, I live in Pennsylvania where currently beer can only be sold in speciality shops and liquor can only be sold by the state owned stores. Taxes get raised on alcohol adding a new inconvenience to consuming it. At the same time, I may soon be able to buy a pack of spliffs at the grocery store (so long as they’re not menthol). Do we really need this many particularisms when all we’re trying to do is get a buzz on somehow and forget we work for the man?
I own a craft distillery and this is the by far worst Yglesias take I've ever seen. I'm just being objective.
Don’t have a lot of brainy stuff to add but I like that Matt references Kleinen and wish he would have done a deeper take on Kleinens criticism of our lack of alcohol regulations. I was persuaded by his illustrations of how much the alcohol industry is dependent on alcoholism, how your average neighborhood bar needs the neighborhood drunks and caters to them, how most of the advertising revenue in booze centers on the cheapest lowest quality stuff partly because that’s what alcoholics prefer, how there is a huge incentive to get people to drink as young as possible and this pervades advertising patterns and ought to be redirected away from young people through regulation. Simply his stat of x percent of alcohol is consumed by y percent of people, x being surprisingly big and y being surprisingly small was eye opening. I drink, but alcohol is bad and we shouldn’t be so skiddish about regulating it and taxing it to minimize its harms.
I think there is little widespread recognition of just how much some people drink. If you have a beer after work every day and then like 5 drinks on friday and saturday you are definitely drinking too much per health recommendations, that's drinking too much per health recs. The type of person who does that probably is thinking "I drink too much but raising the price of a beer by .25 cents would make no difference.
BUT apparently about 75% of the alcohol is consumed by the 10% of people who consume more than the person above. Someone who drinks 10+ drinks a day would surely have their consumption curtailed by a price hike of 25 cents per beer --we're talking about like 1,000/year. And surely it's in this area where you also see a disproportionate share of liquor related deaths. If I remember correctly even for drunk driving the lions share of deaths are from people who are at ~.15 BAC or higher which is very, very drunk.
https://www.washingtonpost.com/news/wonk/wp/2014/09/25/think-you-drink-a-lot-this-chart-will-tell-you/
https://crashstats.nhtsa.dot.gov/Api/Public/ViewPublication/811654
Some states make it harder to by alcohol than others. In Maryland, for example, you can only buy liquor at what are essentially state-run dispensaries, while in Wisconsin it's available at gas stations. I wonder if there's any evidence of what effect if any those differences have.
As a heavy drinker with disposable income, this wouldn't deter me. It didn't when I lived in Stockholm where prices are nearly double. Let's call that "lived experience" rather than anecdote for more credibility.
To some extent the spirits tax premium is working as intended; it's harder to get acute alcohol poisoning from hard seltzer than straight liquor, so the tax on spirits is higher to reflect its higher negative externalities. We'd probably want keep a pattern like that as we raise taxes.
Also this is discussion is more important to Americans than the Israel Palestine discussion.
One thing I find funny in the US is the perseverance of this puritanical streak in the culture and how it affects things like drinking. This is purely anecdotal, but it always seemed to me that the more prevalent the conservatism is in a society when it comes to alcohol, the higher the percentage of risky drinking behavior is relative to total alcohol consumption.
This is almost the antithesis of what Matt is advocating for (and I agree with him, for the record) but what earthly reason is there to have the legal drinking age set at 21?
I'm not sure alcohol consumption is as price elastic as the article infers it is. We have Prohibition as a case study in the extreme. And alcohol purchases conform to the 80/20 rule in that 20% of the customers account for at least 80% of sales (I can't find the exact statistics, but they are startling) which means that compulsive, if not addicted, customers are the core of the industry.
The cost benefit ratio of sin taxes is always complicated. For one, it gives government a financial incentive. Privatizing liquor sales where they are state controlled is always steeped in revenue loss arguments. Also the beneficial health effects of decreasing alcohol consumption would increase government health costs as lives are extended. A grim trade-off but one that has kept tobacco taxes from becoming even more punitive.
Finally, alcohol taxes are based on volume of alcohol not price, which adds to the regressiveness of those taxes since a bottle of Blantons is taxed as much as rotgut whiskey. So it's all more complex than just raising taxes on booze, which is still not a terrible idea.
Strong nanny state vibes on this one. Part of being a free human being with agency is being able to make bad choices. There are plenty of things that are good for people what we don’t compel or incentivize through taxation/subsidy.
Can you please write an article about something we should tax LESS? The persistent theme here is, "we spent $1MM here, but we should have spent $1B there." Is there a thing you don't want to tax?
I simply don't believe that heavy drinkers can be so easily dissuaded from drinking, and forcing light/moderate drinkers to cut back for some vague minor public health benefits is the definition of nanny state. Heavy drinkers are addicts, and we have tons of info about how addicts behave if you make it more difficult to get their fix! They can homebrew or make bathtub/prison booze, they can drink rubbing alcohol or cologne (met a woman from Iran who told me people did this in her country), and of course they can establish a black market. There's a black market in cigarettes for God's sake!
And the politics of it are awful- big Bloomberg soda tax energy, which I don't recall as being particularly successful or popular. Especially coming from the Dems, who already have a nanny state reputation
Moderate drinker here but I think Matt is right about this. Anecdatally, I know a quite a few people who drink to the extent that it interferes with their day-to-day lives, often significantly, and my understanding is that many non-crime social issues are also greatly exacerbated by/widely attributable to alcohol abuse.
My maternal grandfather was a hardcore alcoholic, which stressed the family considerably, especially my mother (the youngest of a large Irish brood), who often had to pick up the pieces since her mother was often disabled with rheumatoid arthritis. I consider myself lucky to be a lightweight and extremely hangover-prone.
Not to mention the selling of alcohol at markets in China is what caused the coronavirus.
"Certain things have seen their prices rise much faster than the rate of overall inflation — that’s normally labor-intensive services like child care and education. Other things, mostly related to computers, have gotten much cheaper. Alcoholic beverages are about average."
So, the alcohol moderates the rise in the total cost of college professors who drink a lot. A classic case of the Baumoholic Cost Disease.
There may be a strong pushback with legitimate consistency arguments from the libertarian left/right/whatever backed by the alcohol lobby if more alcohol taxes/regulations coming at a time of marijuana legalization.
For instance, I live in Pennsylvania where currently beer can only be sold in speciality shops and liquor can only be sold by the state owned stores. Taxes get raised on alcohol adding a new inconvenience to consuming it. At the same time, I may soon be able to buy a pack of spliffs at the grocery store (so long as they’re not menthol). Do we really need this many particularisms when all we’re trying to do is get a buzz on somehow and forget we work for the man?