Taxing the other kind of carbonated beverage

Lest people think that I hate kids, I also want to be clear that I think taxes should be raised on alcohol as well.  I haven’t seen any direct comparisons, but my gut tells me that alcohol kills more people and costs society more than sodas.  Also, adults have a much greater (social) need for alcohol, so, as the experience in Canada and Scandinavia shows, the demand elasticity of it to taxes will be much less than that of soda (or plastic bags).

In a long essay about our ineffective drug policies, Mark Kleiman at the American Interest lays out the case for raising booze taxes:

Raise the tax on alcohol, especially beer. The average excise tax (Federal plus state) on a can of beer is about a dime. The average damage done by that can of beer to people other than its drinker is closer to a dollar. Those costs consist mostly of crimes, accidents and the health care costs redistributed through insurance—and the one-dollar figure doesn’t count the costs to the families and friends of drinkers.

Of course, not all drinks are created equal; a dollar per can would be too high a tax on the great majority of drinkers whose drinking does no harm, and too low on the dangerous minority. But in the words of an old Chivas Regal advertisement, “If the extra money matters to you, you’re drinking too much.” (Note that the optimal tax level would fall if we denied alcohol to bad drunks.)

Raising taxes is also among the best ways to reduce heavy drinking by teenagers, for whom price is often a major consideration.

Here is Yglesias with a little more analysis.

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