Higher Taxes on Alcohol Being Considered

In an effort to help provide health insurance for all, the alcohol industry may be seeing a hike in taxes. Senators are currently focusing on ways to pay for expanding health insurance for an estimated 50 million uninsured Americans, which could amount to $1.5 trillion over a ten-year period. Lawmakers are considering many ways to cut expenses and increase taxes to help pay for the expansion, and an alcohol tax is one of the proposals.

The idea behind the proposed increases is to tax products that contribute to rising medical costs. Alcohol abuse is a risk factor in several types of cancer, liver disease, and psychological problems. There also might be a tax increase on soda and other sugary drinks, which contribute to obesity, diabetes, and heart problems.

Under the proposal, beer taxes would be increased by 48 cents per six-pack (from the current 33 cents); wine taxes would be increased by 49 center per bottle (from the current 21 cents); and the tax on hard liquor would increase by 40 cents per fifth (from the current $2.14). Percentage-wise, wine buyers would be affected the most, with a 233 percent tax increase per bottle.

The higher alcohol taxes would bring in nearly $60 billion over 10 years, and, like the increase in price of cigarettes, could deter people from purchasing alcohol as often.

Posted on May 20th, 2009
Posted in Public Policies

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