A health advocacy group is calling on New Mexico lawmakers to increase taxes on alcohol and liquor as a way to improve public health and bolster the state’s budget.
The group, Alcohol Taxes Save Lives & Money, is calling on Gov. Susana Martinez (R) and state legislators to raise the tax on each six-pack of beer by $1.50 and at least $4 for each 750-milliliter bottle of liquor.
Big Benefits for Government
Adam Hoffer, an assistant professor of economics at the University of Wisconsin–La Crosse, says the cost of the tax hike will likely be passed onto consumers.
“Alcohol will become more expensive, and we know that the price of alcohol only moderately affects consumers’ purchase decisions,” Hoffer said. “The result will likely be a very modest decline in alcohol consumption and millions of extra dollars taken from taxpayers’ pockets.”
Hoffer says punishing consumers of alcohol is a poor way of improving public health.
“We have the ability to use less-blunt tools to address these problems,” Hoffer said. “For alcoholism, think carrots instead of sticks. Help people who want to stop drinking instead of punishing those who drink. Use support groups or other scientifically proven methods for helping people stop drinking.”
‘Lazy Tax Policies’
Hoffer says tax hikes don’t improve the quality of consumers’ choices, but they do improve the government’s bottom line.
“Public policy can help improve these choices,” Hoffer said. “However, we should be scrupulous in our search for the best public policies to improve the lives of citizens, rather than selecting lazy tax policies that do little other than fill government coffers.”
Growing Black Markets
Paul Gessing, president of the Rio Grande Foundation, says the tax hike could increase crime in the state.
“One concern that could arise is cross-border smuggling or even ‘moonshine’ operations,” Gessing said. “There is always the possibility of black market activity when tax burdens get too high.”
