While trying to derail tax reform, there’s been no shortage of misleading statements and outright falsehoods. But a recent article in the Washington Post might be the most outrageous story to date. The article, titled “Here’s how many people would die as a result of the Senate’s tax cut on booze,” goes after a provision in the Senate bill that would reform excise taxes for brewers, distillers, and winemakers . The author cites several “experts,” one of whom claims that this legislation will kill 3,100 people in a two-year period. The only thing more outrageous than that claim is their math. Let me explain.
First, take a look at the chart titled, “Alcohol deaths soar.”
At first glance, it appears this chart shows that alcohol deaths are increasing, but if you look at the fine print you’ll notice it deceivingly leaves out factors like homicides, drunk driving, and other accidents. It just so happens that drunk driving fatalities per 100,000 people have decreased by 65 percent since 1982, and are now at a record low. If the chart included deaths from drunk driving, it would show that alcohol fatalities have actually dropped from 17 deaths per 100,000 to 13.6 deaths per 100,000 in 2015. This downward trend would be even more pronounced if the chart included alcohol-related homicides which, after peaking in the 1980s, are back to near-record low levels not seen since the early 1960s. However, this data is only available up to 2005. So in reality, the aforementioned graph is trending downward, not “soaring.” Of course, however, it would not be politically expedient to do so.
After whiffing badly on the math, the author of the article states, “The math on this is simple: Study after study has shown that when alcohol taxes go up, mortality goes down.” He’s wrong here, too. As demonstrated by this meta-analysis of 182 studies on the subject, the article fails to properly address the elasticity of demand (how the change in price will change demand). Individuals who are most likely to die from alcohol-related health problems tend to be abusers of alcohol. Research shows these individuals have an inelastic demand (meaning a change in price will only slightly affect demand) and will continue to drink no matter how high or low the price of alcohol becomes. As the meta-analysis states, “While many moderate drinkers probably respond to changes in prices of most alcohol beverages, it does not follow that an across-the-board price or taxation policy will directly reduce heavy drinking.” Because of this, higher taxes are an ineffective approach to trying to stop alcohol abuse. This is why another study found that while higher state excise taxes can reduce overall consumption, “alcohol taxes appear to be less effective at curbing binge drinking.”
Alcohol abuse is a serious matter, but it’s hard to take this Washington Post article seriously. Honest people can disagree about the merits of the Senate tax reform bill -- there’s absolutely no place in public discourse for this type of fear-mongering.