Final hearings and mark-ups of proposed legislation to provide for comprehensive health care reform are now moving quickly in the U.S. Senate and House. Up to now, alcohol tax increases (among several other revenue sources) are still very much under consideration: the measure was included in the Senate Finance Committee's revenue options paper and numerous media reports point to the $60 billion that higher alcohol taxes could contribute to health care reform funding over the next decade.

The tax increase under consideration would raise the levy on distilled spirits by 20% (to $16.00 per proof gallon) and equalize the tax on alcohol in beer and wine to that level. Although this measure would represent progress, we are promoting a 50% increase in the tax on spirits (to $20.25 per proof gallon) and equalization at that rate. That tax scenario would provide more than $50 billion in new revenue over five years and some $110 billion over the next decade. In addition, indexing for future inflation would help avoid the steady dilution of the taxes and their contributions to the U.S. Treasury.

Please send the attached letter (or your version of it) to your U.S. senators and representative, as well as the chairmen of the four Congressional committees that have principal jurisdiction over health care reform legislation. And please act now, as the bills are moving rapidly toward committee and floor action. Industry lobbyists claim to be talking to committee staff and members "every day," so it's even more vital that pro-health voices be heard!  

Sample Letter for Campaign

Dear [ Decision Maker ] ,

I am writing in support of your efforts to enact comprehensive health care reform legislation during this Congress and to encourage you to include increases in excise taxes on alcoholic beverages as one source of revenue to help pay for it.

Federal alcohol taxes were last raised in 1991, and because they're fixed at a flat rate per unit of fluid (or alcohol, in the case of spirits), they've declined in value some 35% since then, making alcoholic beverages more affordable to price-sensitive underage drinkers and depriving the federal Treasury of billions of dollars in potential revenue.

Higher taxes on alcohol would serve three important purposes. Even the minimal increase cited in the Congressional Budget Office's revenue options report would yield about $60 billion over the next decade. A justified increase of 50% in the tax on spirits (to $20.25 per proof gallon) and equalizing the tax rate on alcohol in beer and wine at that level would bring in some $110 billion during the same period. That would provide a substantial contribution to the anticipated costs of health care reform. Indexing the tax rates for future inflation would assure that their value does not steadily wither with inflation, as it has historically.

Higher taxes would also moderate alcohol consumption, including among young and heavier drinkers, who are most at risk of alcohol problems and who are also the greatest source of alcohol problems. Reduced drinking at the margins would save lives in car crashes and lower the incidence of alcohol-related diseases.

Fewer problems related to alcohol should also translate into measurable savings for health care, public safety, and also boost productivity in the economic sector.

Most American adults either don't drink (35% - 40%) or drink very little. Most of the alcohol, about 85%, is consumed by the top 20% of consumers. They pay most of the taxes on alcohol now, and they'll be the ones to pay the increase (and also be encouraged to cut back on their drinking). The vast majority of consumers will barely notice an alcohol tax increase (if it is added to the price), which is why popular support for the measure has always polled high.

Even among lower-income Americans the burden won't be excessive because those consumers drink less than the more affluent and fewer of them drink. Only the small cohort of very heavy drinkers at the low end of the income scale will be hit hard. Government services that they will receive from health care reform will help moderate the taxes' regressive effect on them.

Please speak up about and support higher taxes on alcoholic beverages to help fund health care reform. I look forward to hearing your views and to observing successful Congressional action on this important issue.

Sincerely,

Campaign Launched:
June 12, 2009