Let’s fill our cups–and our coffers

The Nonprofiteer is a full-service blog: not only do we tell nonprofits how they can raise money, we tell governments how they can raise money!  Or at least we pass along useful information we find, such as that contained in a recent David Leonhardt column in the New York Times.  The column pointed out the hidden alcohol subsidy that deprives governments at all level of funds they could use to–well, to combat the deleterious effects of alcohol use.

Mr. Leonhardt speaks elegantly for himself:

Taxes serve a purpose beyond merely raising general government revenue.  Taxes on a given activity are also supposed to pay the costs that activity imposes on society.  And for all that is wonderful about wine, beer and liquor, they clearly bring some heavy costs. 

Right now, the patchwork of alcohol taxes isn’t coming close to covering those costs. . . . 

The argument for higher tobacco taxes is simple enough. They help pay Medicare and Medicaid bills for tobacco-related illnesses and also lead to a decline in smoking. On average, a 10 percent increase in the price of cigarettes
causes about a 5 percent drop in smoking, studies show. Not even
addiction, it turns out, can overcome the laws of supply and demand.

If anything, the argument for higher alcohol taxes is even stronger.
Tobacco kills many more people than alcohol, but it mainly kills those
who use the product. Many alcohol victims are simply driving on the
wrong road at the wrong time. Many are also quite young.

So, let’s review: More money for public purposes, check.  Reduced drinking and the ancillary damage associated therewith–everything from auto accidents to domestic violence –check. 

You know how this was going to be the year your agency finally got going with its advocacy efforts?  Let us suggest that–whatever the focus of your nonprofit’s work–this idea would be a perfect place to start.

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3 Responses to “Let’s fill our cups–and our coffers”

  1. Jeff Trexler Says:

    Given the positive effects of moderate alcohol consumption, wouldn’t the optimal approach be a tax that increases the more you drink?

  2. Anita Bernstein Says:

    As a daily (yet not heavy) drinker, I agree with Leonhardt and the Nonprofiteer, even though Jeff Trexler’s point rests on fact. A little alcohol seems healthiest; next healthiest is the teetotal route; worst is ‘too much’. The trouble is that the first path is impossible to encourage through tax manipulation.

    So I say give the tax increase a try, and see what we get. We’d be discouraging both increases from moderate to dangerous (a good result) and zero to moderate (a shame)–but I think the first set, the people who overbooze because they’re subsidized by the lack of taxes, is a lot bigger than the second. Few people who wanted to drink moderately-and-only-moderately were ever deterred by higher booze prices. Settling into my glass of wine or martini, I shouldn’t resent being reminded that my chosen substance is socially destructive. If it’s a little more expensive, maybe I’ll go through it more slowly.

  3. Nonprofiteer Says:

    Thanks to Ms. Bernstein for her good-natured willingness to acknowledge the trouble her drug of choice can cause. Whether moderate alcohol consumption is really a net positive, as Mr. Trexler suggests, has not been established (it’s one thing to say that a glass of wine is better for the heart than no glass of wine, another to say that people overall are healthier and function better with one drink a day than with none); but even if it were, it’s not promotable by any tax scheme I can imagine. As Ms. Bernstein says (and in the words of the old Crown Royal whiskey ad), “If price matters, you’re drinking too much.”

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