Should Alcohol Taxes Be Raised?

6 Pages Posted: 8 Oct 2009

See all articles by Ian W. H. Parry

Ian W. H. Parry

Resources for the Future

Jeffrey A. Miron

Harvard University - Department of Economics; National Bureau of Economic Research (NBER)

Date Written: October 7, 2009

Abstract

As a percentage of price, alcohol taxes have fallen by half over the past quarter-century. This article considers the question of whether those taxes should now be raised. It examines Pigouvian arguments for increased taxes to counter negative externalities from alcohol and finds them ambiguous: there is some evidence that current tax rates are already too high, while other evidence supports a higher tax. The article does find some support for the argument that alcohol taxes are a more efficient way to raise government revenue than other forms of taxation, but the evidence on this is not definitive. The paper includes an appended comment from Jeffrey Miron.

Keywords: alcohol taxation, sin tax, Pigouvian tax

JEL Classification: D60, H21, H20, H23, H27, I10, I30

Suggested Citation

Parry, Ian W. H. and Miron, Jeffrey A., Should Alcohol Taxes Be Raised? (October 7, 2009). Regulation, Vol. 32, No. 3, pp. 10-13, Fall 2009 . Available at SSRN: https://ssrn.com/abstract=1484930

Ian W. H. Parry (Contact Author)

Resources for the Future ( email )

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HOME PAGE: http://www.rff.org/~parry

Jeffrey A. Miron

Harvard University - Department of Economics ( email )

Littauer Center
Cambridge, MA 02138
United States

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

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