FACT SHEET:
BEER CONSUMPTION & TAXES

Adolescents

• Between 2000 and 2001, more than 62 percent of 12th grade students reported using beer on an annual basis. During the same time period, more than 40 percent of 12th grade students reported using beer monthly.¹
• Nearly 25 percent of 12th grade students reported getting "very high" or "bombed" when using beer.¹
• Nearly 38 percent of junior high school students, and nearly 73 percent of senior high school students, reported that beer is "fairly easy" or "very easy" to get.¹

General Population

• Beer accounts for 67 percent of the alcohol consumption reported in the United States.²
• Beer consumed by the highest 10 percentile of drinkers by volume represents 42 percent of the reported alcohol consumed in the United States.²
• Beer accounts for over four fifths (81 percent) of all the alcohol that is reported drunk in hazardous amounts in the United States.²
• In the United States, beer is disproportionately consumed in hazardous amounts (i.e., five or more drinks per occasion) relative to wine and spirits.²

Public Opinion, Public Costs

• Nearly 82 percent of adults favor an increase of five cents per drink in the tax on beer, wine, or liquor to pay for programs to prevent minors from drinking and to increase alcohol treatment programs.³
• Alcohol excise tax rates have rarely been increased to compensate for the effects of inflation. As a result, "real" tax rates have declined over most of the postwar period. This erosion of real tax rates has contributed to overall declines in real beverage prices over time.⁴
• In 1998, the estimated economic cost of alcohol abuse in the United States exceeded $184 billion. This cost is equivalent to roughly $683 for every man, woman and child living in the United States.⁴
• The cost to Americans of underage drinking totals nearly $53 billion, equivalent to $200 for every man, women and child in the United States.⁵
• Each year, the federal government spends between $900 million and $1 billion on alcohol prevention services for people of all ages, less than 2 percent of the annual cost of alcohol use by youth alone.⁵
• According to the Bureau of Alcohol, Tobacco and Firearms, federal excise tax collections for alcoholic beverages totaled more than $8 billion in 2000. Put into perspective, this amounts to just over 4 percent of the $184 billion in alcohol-related costs experienced by the American public.

Alcohol-Related Public Health Issues

• On January 1, 1991, the federal excise tax on beer increased for the first time since 1951. Research shows that the rate of sexually transmitted diseases (STDs) fell sharply from its 1988-90 levels in 1991 and 1992. Nationwide, gonorrhea rates declined nearly 30 percent between 1990 and 1992. Syphilis rates fell nearly 40 percent during the same time period.⁶
• According to researchers at the Centers for Disease Control, a beer tax increase of 20 cents per six-pack would reduce gonorrhea rates by 8.9 percent and syphilis rates by 32.7 percent.⁶
• The estimated annual cost of alcohol-related STDs in the United States is $556 million.⁶
• Increases in the state excise tax on beer decrease the probability of overall violence toward children. Specifically, a 10 percent increase in the excise tax on beer will reduce the probability of severe violence by 2.3 percent, the probability of overall violence by 1.2 percent, and unconditional overall violence (the sum of participation and frequency) by about 2.1 percent.⁷
• Higher beer taxes are associated with lower rates of traffic fatalities. For every 1 percent increase in the price of beer, the traffic fatality rate declines by 0.9 percent.⁸
• Increasing the Federal excise tax on beer in 1988 to the inflation-adjusted equivalent of its value in 1975 would have saved between 3,330 and 3,700 lives annually.⁸
• A 10 percent increase in the price of alcoholic beverages would decrease the number of binge-drinking episodes per month by approximately 8 percent.⁹

References
1. Parent’s Resource Institute for Drug Education (PRIDE). (2001). Pride questionnaire report. 2000-01 national summary: Grades 6 through 12. Bowling Green, KY: author.
2. Rogers, J. D., & Greenfield, T. K. (1999). Beer drinking accounts for most hazardous alcohol consumption reported in the United States. Journal of Studies on Alcohol, 60(6).
3. Harwood, E. M., Wagenaar, A. C., & Zander, K. M. (1998). Youth access to alcohol survey: Summary report. Princeton, NJ: Robert Wood Johnson Foundation. (http://www.rwjf.org/app/rw_publications_and_links/publicationsPdfs/Youth_Access_to_Alcohol_Survey.pdf).
4. National Institute on Alcohol Abuse and Alcoholism. (2000). 10th Special Report to the U.S. Congress on Alcohol and Health. Chapter 6. NIH Publication No. 00-1583. Rockville, MD: U.S. Department of Health and Human Services.
5. Levy, D. T., Miller, T. R., & Cox, K. C. (1999). Costs of Underage Drinking. Prepared by the Pacific Institute for Research and Evaluation in support of the Office of Juvenile Justice and Delinquency Prevention, Enforcing the Underage Drinking Laws Program.
6. Chesson, H., Harrison, P., & Kassler, W. J. (2000). Sex under the influence: The effect of alcohol policy on sexually transmitted disease rates in the United States. Journal of Law and Economics, Vol. XLIII, p. 215-238.
7. Markowitz, S., & Grossman, M. (1998). Alcohol regulation and domestic violence towards children. Contemporary Economic Policy, 16(3):309-320.
8. Ruhm, C. J. (1996). Alcohol policies and highway vehicle fatalities. Journal of Health Economics, 15(4):435-454.
9. Sloan, F. A., Reilly, B.A., & Schenzler, C. (1995). Effects of tort liability and insurance on heavy drinking and drinking and driving. Journal of Law and Economics, 38(1):49-77.