Neo-Prohibitionism, Alcohol Taxes, and Central Planning in California

The last time I had a critical look at the neo-prohibitionists, it was via a pamphlet opposing a tobacco tax hike in California. Now, the Marin Institute has completed a “landmark” study suggesting that we need to hike alcohol taxes in the Golden State.

And landmark it certainly is: the Marin Institute adds up every traffic accident, every fall & tumble, every angry word, and every rape, that can be attributed to booze, throws in “pain and suffering” to boot (the trial lawyers will love this study), and conclude that current alcohol taxes just do not cover the social cost of alcohol. Jack them up!

Well, I believe that no punishment is too great for the drunk driver who injures or kills someone. But does the Marin Institute really think that raising the excise tax by a quarter will stop a rapist?

Apparently so. The Institute seems a little overconfident about how much a “reasonable” excise tax would effect drinking, claiming that another 25 cents per drink will cut consumption by 9 percent!

Sounds a little optimistic to me. Absent from the study are the costs of more government intervention, through taxation or otherwise. For example: what about kids in Lake Tahoe driving over to Nevada to buy cheaper booze? What about bootleggers? (Maybe not for a quarter a beer, but this is surely only a start.) And most of all, if they’re right that direct government costs (policing and such) are $8.3 billion a year in California , what taxes would they cut to give back to non-drinkers the higher taxes they’re planning to take from drinkers: the sky-high state personal income tax? Other sales taxes? Property taxes?

On tax cuts, which would make Californians more prosperous (and healthy), the Marin Institute is silent. On tax hikes and running your life, they’ve got the plan.

Nothing contained in this blog is to be construed as necessarily reflecting the views of the Pacific Research Institute or as an attempt to thwart or aid the passage of any legislation.

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