Beall Proposes $2 Billion Beer Tax To Pay ForHealth Costs
Assemblymember Jim Beall, Jr., D-San Jose, is proposing legislation to increase the excise tax on beer to generate $2 billion for under-funded health and law enforcement services that must cope with the havoc -- traffic accidents and fatalities, domestic violence, and illnesses -- that is fueled by the alcohol industry.
“Beer is the alcohol of choice for under-age drinkers,’’ Beall said. “Research tells us that kids who begin drinking before they are 15 are more prone to become alcoholics. They are also more susceptible to alcohol-related problems such as vehicle accidents and assaults later in life than people who wait until they are 21 or older to take their first drink.
“The fallout from alcohol consumption costs Californians nearly $36 billion a year in increased health costs, crime, lost productivity, and injuries from accidents and abuse. It’s time for the beer industry to help us with the staggering burden it has helped to create.’’
The Assembly Constitutional Amendment proposal will increase the tax on a six-pack of beer by $1.80 or 30 cents per can or bottle. A two-thirds majority of the Legislature is required to get the measure before voters who must also approve it. The amendment’s language is being completed by the Office of Legislative Counsel.
If passed, this excise tax will be the first new levy on beer in California since 1991 when it was raised by two cents a can. In contrast, the tax on a pack of cigarettes is 87 cents. Accounting for inflation, California’s alcohol and beer tax has declined by 45 percent since 1992. An excise tax is levied against the manufacturer, who may choose to pass that cost on to consumers.
Raising the excise tax accomplishes three goals:
- Generates an estimated $2 billion for emergency and trauma care, prevention and intervention programs, crime prevention, mental health services and treatment, victim assistance, school counseling, and programs to prevent under-age drinking. In 2005, alcohol-related traffic accidents claimed 1,574 lives and injured 30,810 in California. In 2004, alcohol played a role in 3,691 deaths statewide, according to the California Department of Alcohol and Drug Programs.
- About one-half of all sexual assaults in America involved drinking by either the perpetrator or the victim, or both, according to a 2002 study funded by the National Institute on Alcohol Abuse and Alcoholism.
- Forces those responsible for the problem to pay for it. One-third of the population does not drink but yet two-thirds of the alcohol-related costs for health care and prevention are borne by government programs.
- Prevents under-age drinking. Because of its inexpensive price compared to other spirits, beer is the easiest alcoholic beverage for teens to obtain. A National Academy of Science study on under-age drinking recommended Congress and state legislatures raise excise taxes on beer to curb consumption by teen-agers who, as a group, are highly price conscious. Other researchers have concluded that raising beer taxes not only minimizes drinking but reduces alcohol-associated problems such as broken families, venereal diseases, property damage, and birth defects caused by fetal alcohol syndrome.
In calling for a reduction in under-age drinking, a 2007 report by the Office of the Surgeon General said alcohol’s “long-term negative effects’’ on the developing adolescent brain can lead to impulsiveness, depression, anxiety, aggression, and other behavioral problems.
A 2001 study published in the Journal of Public Health Policy that examined 20 years of statistical information on handgun sales, youth homicide, and beer sales in California determined that reducing beer sales may also reduce homicides.
Meanwhile, beer corporations continue to rake in profits. American’s biggest brewer, Anheuser-Busch, reported a net income of $2.1 billion in 2007, nearly 8 percent above the previous year; Molson Coors reported $507 million in revenue after taxes.
“As responsible corporate citizens, breweries should be willing to pay their fair share of the damage that alcohol wreaks on society,’’ Beall said.