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Study: Paying more for alcohol saves lives

  • Story Highlights
  • Study finds fewer alcohol-related deaths in Alaska when alcohol tax was raised
  • Researchers report 29 percent drop in 1983, 11 percent drop in 2002 after tax hikes
  • Alcohol industry says higher taxes would hurt responsible drinkers and economy
  • Advocates say higher taxes are needed to catch up with inflation
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By Madison Park
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(CNN) -- Higher taxes on alcohol can make a night out more expensive but could save lives, according to a study released Thursday.

After Alaska raised its alcohol taxes, the number of alcohol-related deaths dropped, a study says.

Each time the state of Alaska raised its alcoholic beverage tax, fewer deaths were caused by or related to alcohol, according to the study that examined 28 years of data.

When Alaska raised its alcohol tax in 1983, deaths caused by or related to alcohol dropped 29 percent. A 2002 tax increase was followed by an 11 percent reduction, according to the study published in the American Journal of Public Health.

"Increasing alcohol taxes saves lives; that's the bottom line," said the study's lead author, Dr. Alexander Wagenaar, a professor at the University of Florida's Department of Epidemiology and Health Policy Research. "The tax increase caused some reduction in consumption of alcohol. The reduction saved lives."

The study, funded by the Robert Wood Johnson Foundation, tracked the number of deaths for every quarter in Alaska from 1976 to 2004.

Using information from death certificates, Wagenaar and the co-authors compiled the number of deaths caused by alcohol, such as alcohol poisoning and alcoholic liver disease, and deaths linked to alcohol, such as cirrhosis and chronic pancreatitis. Deaths caused by alcohol-related car accidents or violence were not included.

Deaths from Alaska were compared with data from other states to control for nationwide factors, such as population growth and advanced medical care.

The authors found 23 fewer deaths per year after a 1983 tax hike and 21 fewer deaths per year after a 2002 increase.

Researchers chose to study Alaska after a political debate over the most recent alcohol tax increase in the Last Frontier state.

"No other state in recent years has increased alcohol taxes in the way that Alaska did in 2002," Wagenaar said. "Basically, they conducted the experiment, and we studied it."

Although Alaska has a population of fewer than a million people, the state "is not highly different when looking at epidemiological trends," he said, estimating that about two-thirds of Americans drink.

"There's no reason to think the experience in Alaska would be different than anywhere else," Wagenaar said. "The study looks at the responsiveness of drinking."

The Finland study

Researchers in Finland found similar results when examining the relationship between alcohol taxes and alcohol-positive deaths.

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For years, Finland had high alcohol taxes. In March 2004, the Finnish government lowered the taxes nearly 33 to 44 percent to protect domestic sales because officials worried that patrons would flock to neighboring nations in search of cheaper booze.

Consumption levels in Finland increased 50 percent from the previous year. Finnish researchers also found that arrests for drunken and disorderly conduct increased by 11 percent after taxes were lowered.

University of Helsinki researchers used postmortem toxicology tests to determine that alcohol was the underlying cause of death for 1,860 Finns that year, a 20 percent increase from 2003.

"Taxation has indeed been found to be the most cost-effective measure in reducing alcohol consumption," the authors concluded in a 2007 article published in the Addiction journal. "Raising alcohol tax level has low costs and is effective in reducing alcohol consumption and thus alcohol-related harms."

U.S. policy

Unlike with cigarettes, supporters of higher beverage taxes say alcohol has largely avoided scrutiny in the United States.

"When the excise tax on tobacco went up, consumption went down and the diseases associated with tobacco also went down," Wagenaar said. "Now, with the current study, we're finding the same thing for alcohol. Simply adjusting taxes has quite a noticeable rate on alcohol deaths. They parallel each other quite a bit."

In addition to public health implications, state governments should re-examine their alcohol excise taxes on for fiscal reasons, said George Hacker, director of Alcohol Policies Project for the Center for Science in the Public Interest.

Nearly half of the states have had the same alcohol taxes for more than 20 years, and Wyoming hasn't raised its tax on alcohol since the 1930s, thus not keeping up with inflation, Hacker said. The beer tax in Wyoming is less than 2 cents per gallon.

"Given state budgets are in the toilet bowl, it's an available source of revenue that has not been looked to for a very long time," Hacker said. "The tax increases are long overdue. The product doesn't pay its way in covering economic and social costs associated with its use."

Alcohol industry

The American Beverage Licensees, which represents retailers of beer, wine and spirits, opposes alcohol tax increases.

"Based on historical evidence, raising taxes on alcohol beverages would have a highly negative impact on the economy," said Harry Wiles, executive director of the American Beverage Licensees, in an e-mailed statement. "Increasing alcohol taxes could lead diminishing returns for the government should responsible, moderate consumers decrease their consumption."

Raising taxes would penalize more than 100 million responsible alcohol consumers and would not deter the few abusers, who don't cut back when price fluctuates, Wiles said.

"Any across the board tax increase would not target the problem drinker but would simply penalize those who enjoy wine and spirits and drink responsibly," Wine and Spirits Wholesaler of America CEO and President Craig Wolf said in an e-mailed statement.

The industry also sponsors social responsibility programs to help educate consumers, he added.

Efforts to raise alcohol taxes are often thwarted and labeled neo-Prohibitionist by the alcohol industry, Hacker said.

"The legacy of Prohibition leaves sour tastes about doing anything about curbing alcohol use," he said. "It conjures images of Prohibition. The industry stokes it as much as it can. The industry uses the imagery and metaphor of freedom and civil right, almost like it is a civil right to drink, given it was once prohibited."

In the latest barometer of American public opinion, Maine voters overwhelmingly rejected a state law that would've increased the excise tax on alcoholic beverages on Election Day.

The law would've increased excise taxes by 116 percent for beer and wine to fund a controversial state health care program.

Fed Up With Taxes, a Maine coalition of chambers of commerce and various business associations, fought the law.

Ted O'Meara, spokesman of the group, said the argument that higher taxes would reduce alcohol consumption didn't enter the debate, as hard liquor was exempt from the tax hikes.

"Our main point was that this was a massive new tax increase," O'Meara said.

Voters rejected the law by a 2-to-1 ratio.

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