Benjamin Franklin thought that one could never avoid death and taxes. However if you meet death, then you don’t have to pay taxes. Perhaps we may avert one because of the other.
Now, can we do it the other way round: Avert death by paying taxes? Perhaps, paying higher taxes? Well, actually we can.
A team of researchers from University of Florida studied death rates in Alaska. Alaska is the northern most state of USA. Its population is around 700,000, which is relatively small.
The Alaskan government decided to increase taxes on alcohol. It was done twice, sharply, over the past forty years.
The academics from the Medical College of University of Florida decided to study the number of people dying each year due to health conditions such as alcoholic liver disease in Alaska following these two hikes.
First, in 1983, by 37% for beer and 35% for spirits. Second, in 2002, by 200% for beer and 128% for ‘soft’ alcohol. It is important to note that these were significant hikes. However, the final price of alcohol beverages apparently were higher following the 1983 tax hike.
The academics from the Medical College of University of Florida decided to study the number of people dying each year due to health conditions such as alcoholic liver disease in Alaska following these two hikes. Just to make sure that the fluctuations, if any, are not due to other factors, such as health care or economic changes in the country as a whole, they compared their findings with all other states of USA for that time period.
What they found is really amazing, although not surprising. They found that taxes can and do avoid deaths. In 1983, the alcohol tax hike prevented 23 deaths - in that tiny population. That amounted to a 29% reduction in the alcohol-related death rate.
In 2002, it was a case of an 11% reduction in deaths (21 deaths averted a year). The lesser effect in 2002 following a larger price hike is probably due to the larger impact on the final sale price in 1983 than in 2002. Most importantly, the effects lasted for years onward.
The drop in death rate was significant 19 years apart immediately after alcohol tax hikes. This drives away doubts that the drop in deaths was purely coincidental.
Other states in USA did not show any such drops in their death rates in those two time points, which confirms this effect is related to alcohol tax hikes.
The researchers were so encouraged by their findings they started working on all available research data coming from all corners of the earth. Findings of this new study were published by them the following year.
- n In 2002, it was a case of an 11% reduction in deaths. The lesser effect in 2002 following a larger price hike is probably due to the larger impact on the final sale price in 1983 than in 2002
- n Do we still need to debate on this matter? Alcohol tax hikes can save lives; avert deaths
They were able to aggregate findings of 50 research publications. This time they looked at data on deaths due to conditions other than alcohol related health conditions, such as deaths due to drunk driving and alcohol-related violence.
They also looked at burden of diseases related to alcohol. The researchers found that “the aggregated results from this fairly large set of studies showed clearly that beverage alcohol prices and taxes were significantly and inversely related to all outcome categories examined”, that is deaths and disease due to alcohol.
Do we still need to debate on this matter? Alcohol tax hikes can save lives; avert deaths.
Obviously, the explanation is that higher prices resulting form higher taxes, make alcohol less affordable to people. Lower alcohol use in the community leads to less disease and deaths in the country.
The alcohol industry dislikes such findings. Terms such as ‘less affordable’ and ‘lower alcohol use’ scare them because it hurts their income and their profits. Believe me, we are now talking about billions of dollars and rupees.
It is quite logical, simple and effective for the alcohol industry to spend a fraction of that money and create an atmosphere where raising alcohol taxes is not favoured. If they are very smart, they might actually end up creating an atmosphere that favours lowering of alcohol taxes.
It is time to decide if we are going to increase taxes so deaths are prevented or manipulate things the other way. It is a life and death matter.