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The Effects of Alcohol Excise Tax Increases on Public Health and Safety in Texas

March 2015

Megan C. Diaz, Frank J. Chaloupka, David H. Jernigan


The article attempts to calculate the effects a 10 cent per drink excise tax would have on the state of Texas. The study finds that the proposed tax would not only account for a significant amount of increased revenue, but would also have positive health effects such as a 7.4 percent decrease in drunk driving, and alcohol related mortality by 34 percent. Additional benefits predicted include a decrease in crime, less underage drinking, reduced fetal alcohol syndrome, and increased productivity by students. The study also called into attention that individuals making higher sums of income tend to drink more, so the tax would have some elements of progressivity, and further that any regressive elements could be offset by earmarked spending of new revenues.

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Policy Implications

The study can be used in the possible formulation of an alcohol excises tax, or similar excise tax. The study suggests that a tax such as the one studies could increase revenues by a large margin while increasing health outcomes. While Michigan has a relatively high liquor tax, wine and beer taxes fall below average compared to the rest of the country.

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