By L.A. Williams, Correspondent
Christian Action League of North Carolina
RALEIGH — Fewer kids smoking, less alcohol consumed, a slow-down in the spread of sexually transmitted diseases and an estimated $169 million boost to the state budget — sounds like a winner of a plan for North Carolina, if only our legislators were willing to seal the deal.
But support for Gov. Mike Easley’s proposed cigarette and alcohol tax increases is hard to come by at the Capitol, despite the benefits touted by experts and obvious to anyone who has ever had to choose between a staple and a luxury at the supermarket checkout.
Increasing the price of alcohol — Easley’s plan would take beer tax from 5 to 9 cents per can — would encourage people to drink less; just as adding another 20 cents in taxes to a pack of smokes would make them think twice before lighting up. Most importantly, by helping to curb abuse, the measures would save lives.
According to the Campaign for Tobacco-Free kids, studies show that every 10 percent increase in the price of cigarettes will reduce youth smoking by about 7 percent and overall cigarette consumption by some 4 percent. Easley recommends increasing the cigarette tax from 35 cents a pack to 55 cents, which would still be less than half the national average of $1.14.
The only thing Vinny DeMarco, National Coordinator of Faith United Against Tobacco, sees wrong with the proposed tax increase is that it’s too small.
“We wish North Carolina would join Maryland and Washington, D.C., which recently passed $1 increases per pack. An increase like that would substantially decrease teen smoking,” said DeMarco. “Still, it is great that he is proposing some kind of increase.”
Even modest increases can net results, according to Phillip Cook, a Duke University professor of public policy and economics.
“The small increase in cigarette taxes will have a small but noticeable effect on teen smoking initiation and general use,” Cook said.
After recent cigarette tax hikes in Michigan ($1.25 to $2 per pack), smoker calls to the state smoking quit-lines skyrocketed, going from 550 to 3,100 calls per six months. Study after study has shown that when prices go up, smoking goes down.
Consider this quote from internal documents at cigarette maker Philip Morris: “Jeffrey Harris of MIT calculated … that the 1982-83 round of price increases caused two million adults to quit smoking and prevented 600,000 teenagers from starting to smoke … We don’t need to have that happen again.” Another Philip Morris document stated: “A high cigarette price, more than any other cigarette attribute, has the most dramatic impact on the share of the quitting population … price, not tar level, is the main driving force for quitting.”
In the heart of tobacco country, North Carolina had the lowest cigarette tax in the nation at 5 cents per pack until lawmakers raised it to 30 cents in September 2005 and then to 35 cents in July 2006. Less than a year later, the state health director reported an 18 percent drop in cigarette consumption and a more than $110 million increase in state revenues not to mention health care cost savings and most of all, saved lives. The governor’s current proposed increase, though not as high, has the potential to save thousands more lives in the state where nearly 12,000 adults die each year from smoking and take with them another 2,000 nonsmokers killed by secondhand smoke. Estimates show that 193,000 Tar Heel kids now under 18 will ultimately die prematurely from smoking.
It’s those young lives that motivate DeMarco and others in the faith community to push legislators to support the cigarette tax hike.
“I believe that if the faith community would come together again like we did a few years ago, we could succeed in accomplishing this goal,” De Marco said. He said some lawmakers who oppose the issue usually do so based on a knee-jerk reaction against all taxes or out of an unfounded fear that their constituents won’t like the added tax.
“The truth is voters support this. Legislators shouldn’t worry at all that this is unpopular; the smart political thing to do is to support a cigarette tax increase,” DeMarco said.
According to the Campaign for Tobacco-Free Kids, polls show that voters across the U.S. support cigarette tax increases, in most states by a two-to-one margin. Support for tobacco tax increases is also bipartisan. In fact, studies show that at least 30 percent of voters from each of the major parties said they would cross party lines to vote for a candidate of the opposite party who supports the cigarette tax if the candidate from their own party did not.
Not surprisingly, voters also support additional taxes on alcohol. Seven in 10 North Carolinians strongly support a tax on beer, wine and other alcoholic beverages to generate money for health and long-term care services.
In addition to a 4-cent increase per can of beer, Easley’s budget calls for increasing taxes on fortified and unfortified wine by 4 cents per liter and upping the spirituous liquor tax from 25 percent of wholesale price to 29 percent.
“For alcohol, probably the most important tax is the beer tax, since the bulk of ethanol consumption and abuse is associated with beer,” said Cook, adding that the beer excise tax has not been increased in North Carolina since 1969.
“A dollar in 1969 is worth $5.85 today. If the state had kept its excise tax in step with inflation, the current tax would be 29 cents per 12-ounce can,” Cook said. “In that respect, we can see how modest the governor’s proposal is — if we had the tax level ‘right’ in 1969, then we have a lot of catching up to do!”
Just last year Princeton University Press published Cook’s latest book “Paying the Tab: The Costs and Benefits of Alcohol Control,” in which the author shows how American policymakers have, for years, ignored the supply side of the equation when it comes to alcohol.
“Legislators at the state and federal level have been reluctant to raise alcohol excise tax rates for many years. The result is that the effect of these taxes has been substantially undercut by inflation,” Cook said.
Taking another look at the beer tax example, the North Carolina excise tax of 53 cents per gallon of beer, established in 1969, when adjusted for inflation, is equivalent to only 13 cents per gallon today.
Further, even the increased taxes would be scarcely noticed by the majority of people, since on average consumers spend less than 1 percent of their total income on alcohol.
“The fact is that a third of adults don’t drink at all and most drinkers drink responsibly, so the only ones who would be really affected by the tax are the ones who are really doing a lot of harm with heavy, addictive drinking,” said Kim Crump manager of federal relations with the Center for Science in the Public Interest in Washington D.C.. She said national statistics show that that the median male drinker has three beers a week on average, making his share of the proposed tax 12 cents a week, while the median female drinker has only 1/2 beer and would add an additional 2 cents to her cost.
“On the other hand, 80 percent of consumption is among 20 percent of drinkers,” Crump said. “That’s the binge drinking that generates the most harm and costs.”
Gov. Easley, who would earmark funds generated from the alcohol tax hike for mental health reform, hit the nail on the head when responding to critics.
“If four cents a can, if that causes somebody economic hardship, then they’re probably drinking too much and are going to be customers of mental health, substance abuse sooner or later anyway,” the governor told reporters.
According to the Centers for Disease Control and Prevention, alcohol is to blame for as many as 85,000 deaths annually in the United States and is a contributing factor in a host of health problems from various cancers to liver disease and obviously alcoholism. Besides the human toll, the economic and social costs of drinking far exceed any alcohol tax revenue. Americans pay an estimated $184 billion per year in health care, criminal justice, social services, property damage and loss of productivity, according to a study report from the National Institute on Alcohol Abuse and Alcoholism.
Even if increased alcohol taxes never put a dent in costs, they are a necessary measure in the fight to save lives, especially teenagers.
Studies show that higher alcohol taxes lead to reductions in both the amount that young people drink and how often they consume. The results of those lower factors include, among other benefits, lower traffic crash fatality rates and reduced incidence of certain types of crime and STDs.
According to the Centers for Disease Control and Prevention, every time beer taxes go up or the legal drinking age is raised, gonorrhea rates usually drop among young people. A CDC report issued in 2000 showed that raising the tax on a six-pack of beer by only 20 cents could reduce gonorrhea in this age group by up to 9 percent. The reason is that sober young people are less likely to participate in high-risk sexual activity such as unprotected sex or multiple partners.
Imagine the number of other high-risk behaviors and consequences that could have been avoided if potential teen drinkers had been priced out of the market. The National Bureau of Economic Research estimates that if alcohol taxes had kept pace with inflation since 1951, the number of youth who drink beer would have declined by 24 percent.
But alas, legislators are reticent to use the taxes to battle alcohol abuse.
“A powerful tool for promoting public health has been abandoned,” Cook said. “The main reason, I believe, is that the commercial interests (beer distributors and manufacturers) have not been adequately confronted in the political arena by our national interest in promoting the public health.”
Crump agrees.
“The alcohol industry is really a formidable political power and an obstacle to public health reform,” she said, estimating that about 2/3 of U. S. lawmakers accept contributions from the alcohol industry and even those who don’t take contributions are reluctant to step out on alcohol tax issues for fear that the industry will heavily fund their opponents.
“Cigarette and alcohol taxes are no genuine economic threat to consumers or cause constituents to lose confidence in their lawmaker’s leadership,” says Rev. Mark Creech, executive director of the Christian Action League. “Legislators should listen to their better angels on this one. The revenue generated by these taxes would curb dangerous forms of alcohol and tobacco consumption, while providing assistance to the worthiest of our state’s needs. For heaven’s sake, do we value a drink and a smoke that badly? Lawmakers really need to reconsider their position on this issue!”
