Group Pushes Alcohol Tax Hike

AgencjaAIAC via Pixabay / creative commons license

AgencjaAIAC via Pixabay / creative commons license

  • Ed Williams
  • Monday, September 12, 2016

An organization based in Santa Fe is hoping lawmakers will consider a plan in an upcoming special session that would raise taxes on all alcoholic beverages. The group recently commissioned a poll that found a majority of New Mexicans are in favor that idea—but Governor Susana Martinez has said she won’t support any kind of tax hike.

The director of Alcohol Taxes Save Lives & Money, Peter DeBenedittis, is hoping public support for the tax increase will be enough to change the governor’s mind. He sat down with KUNM to talk about the plan.

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DeBenedittis: New Mexico leads the nation in states where people drink themselves to death. One out of six working-age New Mexicans die from alcohol. That’s a really serious problem. By raising alcohol taxes 25 cents a drink, we’re going to lower demand by about 10 percent and we’re going to save 52 lives our very first year.

KUNM: How do you know that this is actually going to work? Is there any data to prove that this will actually decrease consumption of alcohol?

DeBenedittis: They just raised their alcohol taxes 10 cents a drink in Maryland a few years back, and they’ve had a reduction there. We used to be tied with Alaska for the worst state for people drinking themselves to death, and since then they’ve had two alcohol tax increases and now we’re almost twice as far out ahead of them, in the number one position of people suffering alcohol harm and alcohol abuse.

There are hundreds of studies they’ve done on this. It’s a direct science now, you can actually find out the elasticity of price—when you tax a certain amount you have a certain reduction in demand, and for alcohol it means you get a huge health benefit.

KUNM: A lot of people like to have a glass of wine or a beer after work to unwind. For someone making a good bit of money 25 cents per drink is not that much, but I wonder if you’re creating a situation where low-income people might be unfairly targeted by this kind of measure?

DeBenedittis: Right now, whether you drink or not, you pay $400 a year hidden away in your gross receipts tax and your personal income tax to pay for the drunk driving costs, the court cases, the extra medical care that we’re paying out in Medicaid, the detention, the police and ambulance. So you’re already paying that. Half of New Mexicans don’t even drink, according to the CDC and a poll that we just had conducted a few weeks ago. They’re not going to pay a penny more; this is going to open up more resources for those people.

Now people say “this is a regressive tax,” and by definition it is. But in reality, in effect, it’s not.  The people who drink excessively in the upper income levels are going to pay about three quarters of the tax increase. People earning over $75,000 a year drink at higher rates. The people at lower incomes drink more when they drink—they have fewer sessions of drinking but they’ll consume more alcohol during that session. But the people at the higher incomes, they’re drinking pretty much constantly, just not as much in a single sitting. They’re going to bear the brunt of the tax increase.

KUNM: Raising taxes is always a hard sell. And we have to remember that the governor has to introduce any measure that will be heard in a special session, and she has said that she’ll veto anything that raises taxes. So, does this have any chance of moving forward?

DeBenedittis: When the people lead, leaders follow. We haven’t raised alcohol taxes in New Mexico since 1993. Nobody else in the state can say they get that kind of preferential treatment in their tax bill. We had a poll conducted by Research and Polling, and they found out that even among Republicans, support for this measure ran 2-1. So it’s not like this is a party issue of us vs. them. It’s not like that at all. Everybody wants this, it’s just that the leadership in our state hasn’t come around to say, “this is what the people are really clamoring for.”

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KUNM’s Public Health New Mexico project is funded by the W.K. Kellogg Foundation, the McCune Charitable Foundation, and the Con Alma Health Foundation. Find this story and more at publichealthnm.org.

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