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Home > Community News > ALCOHOL TAXES AND MARYLAND: THE FACTS

ALCOHOL TAXES AND MARYLAND: THE FACTS

Alcohol and Maryland’s Young People

Nationwide, alcohol use has slowly been falling among high school students, but from 2005 to 2007 alcohol use increased among Maryland high school students:
· Current use (in the past 30 days) went up from 40% to 43%.  

o In 2007, 36% of ninth-graders and 56% of twelfth graders reported drinking in the past month.
· Binge drinking (5 or more drinks in two hours) went up from 21% to 24%.
o In 2007, 18% of ninth-graders and 36% of twelfth graders reported binge drinking in the past 30 days.1

Alcohol use is associated with the three leading causes of death among young people ages 10 to 20 in Maryland:  unintentional injury (including motor vehicle crashes), homicide and suicide.2

Underage drinking cost the citizens of Maryland $1.2 billion in 2005 in medical costs ($137 million), lost productivity ($300 million) and pain and suffering ($810 million).3  

Alcohol Taxes and Youth Drinking

Numerous federally-funded studies have concluded that increasing alcohol taxes reduces drinking and alcohol-related problems, and that this is a more effective and cost-effective way of doing this than most other prevention programs.4, 5

Increased taxes have particularly strong effects on youth drinking.  Studies have found that increasing alcohol taxes can reduce:
· How much and often kids drink,6
· How often kids are involved in automobile crashes,7
· Frequency of sexually-transmitted diseases (STDs) among youth.8

Alcohol Taxes in Maryland
Federal and state alcohol taxes are flat taxes, meaning they do not rise with inflation.  In effect, alcohol gets a tax cut every year.
In Maryland, alcohol taxes have not been raised on beer and wine since 1972 and on distilled spirits since 1955.
Current alcohol taxes in Maryland are $.09 a gallon for beer, $.40 a gallon for wine, and $1.50 a gallon for spirits.  If these rates had kept up with inflation (like income taxes do), the taxes today would be $.46 a gallon for beer, $2.04 a gallon for wine, and $11.95 a gallon for distilled spirits.

The failure of alcohol taxes to keep up with inflation has helped alcoholic beverages to become more price-competitive with milk and soda pop, sending a dangerous message to young people.
Maryland has the 8th lowest state beer tax in the country, the 3rd lowest state distilled spirits tax, and the 13th lowest state wine tax.9

The Maryland Health Care for All Initiative is proposing to raise alcohol taxes by a dime a drink to fund health care for all Marylanders.  The new rates would be $1.16 per gallon for beer, $2.96 per gallon for wine, and $10.03 per gallon for distilled spirits.

REFERENCES
1. Centers for Disease Control and Prevention. Youth Risk Behavioral Surveillance System.  http://www.nccd.cdc.gov/yrbss. Accessed October 20, 2008.
2. Centers for Disease Control and Prevention. Web-based imaging statistics query and reporting system (WISQARS).  http://www.cdc.gov/ncipc/wisqars. Accessed October 20, 2008.
3. Pacific Institute for Research and Evaluation. Underage Drinking in Maryland: The Facts.  http://www.udetc.org/factsheets/Maryland.pdf. Accessed November 26, 2008.
4. Hollingsworth W, Ebel BE, McCarty CA, Garrison MM, Christakis DA, Rivara FP. Prevention of deaths from harmful drinking in the United States: the potential effects of tax increases and advertising bans on young drinkers. Journal of Studies on Alcohol. 2006;67(2):300-308.
5. Chisholm D, Rehm J, Van Ommeren M, Monteiro M. Reducing the global burden of hazardous alcohol use: a comparative cost-effectiveness analysis. Journal of Studies on Alcohol. 2004;65(6):782-793.
6. Grossman M, Coate D. Effects of Alcoholic Beverage Prices and Legal Drinking Ages on Youth Alcohol Use. Journal of Law and Economics. 1988;31(1):145-171.
7. Ponicki WR, Gruenewald PJ, LaScale EA. Joint Impacts of Minimum Legal Drinking Age and Beer Taxes on US Youth Traffic Fatalities, 1975 to 2001. Alcoholism: Clinical and Experimental Research. 2007;31(5):804-813.
8. Grossman M, Kaestner R, Markowitz S. An investigation of the effects of alcohol policies on youth STDs. Adv Health Econ Health Serv Res. 2005;16:229-256.
9. National Insitute on Alcohol Abuse and Alcoholism. Alcohol Policy Information System.  http://www.alcoholpolicy.niaaa.nih.gov/. Accessed November 26, 2008.

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