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Sate Prevention
Warning: Alcohol is linked to
Alcoholism
Fiscal Effects of Increasing the Alcohol
Excise Tax
Alcohol misuse results in over $300,000,000
annually in costs paid by Louisiana taxpayers. These costs are paid
out of the general fund in areas of health care, law enforcement,
and emergency services.
Increasing excise taxes is a means of both
reducing costs and promoting economic growth. As a result the size
of government is reduced. The reduction in the size of government
results from the reduction of the state budget in the areas of law
enforcement, health care, and EMS services. Increasing the alcohol
excise tax also represents and engine for economic growth by
increasing the desirability of Louisiana for businesses and tourists
by reducing the visibility of alcohol related problems.
The
budget saving from increasing the excise tax can be estimated.
Raising the tax 10 cents a drink represents a 15% average increase
in the cost of alcoholic beverages, assuming the costs are passed on
to the consumer. According to economic studies this would
translate into a 10% reduction in alcohol consumption. A reduction
in alcohol consumption of this magnitude would result in
proportionate decreases in alcohol related problems.
Projected
Budget Saving
Current
Projected Cost
(Millions)
Saving (Millions)
Health
Care
$ 157
$ 16
Law
Enforcement
$ 87 $ 9
EMS
Services
$ 67 $ 7
$ 32
Economic
Development
Rather attempting to attract business to Louisiana with budget
giveaways raising alcohol excise taxes holds the promise of creating
Louisiana communities businesses want to relocate to. Tourism
would be affected in a similar fashion. Much of the crime in South
Louisiana that can act as a deterrent to conventions and individual
tourists visiting the state is alcohol related. In addition,
research demonstrates increasing the price of alcohol is less likely
to affect the consumption pattern of tourist compared with the
general population.
Source: Richard Scribner MD, MPH, LSU Health Sciences Center
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