Does an Alcohol Tax Really Work?

How Imposing a Tax on Alcohol Can Help Reduce Drinking and More

Studies have shown that placing a tax on alcohol not only helps to create revenue for cities, counties, and more, but it can also help reduce drinking. The U.S. Centers for Disease Control and Prevention (CDC) recommends several ways to help prevent excessive alcohol use.

In addition to increasing alcohol taxes, the CDC recommends:


  • Regulation of alcohol density
  • Dram shop and commercial host liability
  • Limits on days of sale
  • Limits on hours of sale
  • Enhanced enforcement for selling to minors
  • Electronic screening

Alcohol taxes along with other preventive measures can help deter excessive alcohol consumption. When alcohol is at a higher price, fewer people are willing to pay for it. Tobacco is a prime example of where a tax helped to reduce the number of smokers (particularly teen smoking). 

As noted in a community coalition report on “Increasing Alcohol Taxes to Fund Programs to Prevent and Treat Youth-Related Alcohol Problems” alcohol taxes have been effective at reducing youth drinking and at reducing chronic liver disease and cirrhosis. The money raised from an alcohol tax can be used to fund programs for youth or for those that have been negatively affected by alcohol.

The tax provides revenue for the state while helping to deter drinking. To date, alcohol taxes have rarely been raised. Research over the course of several decades has seen an increase in alcohol tax linked to reductions in alcohol-related traffic deaths and health problems. 

Experts also agree that there should be restrictions on alcohol marketing, particularly when it is geared toward a young audience. While some of these preventative measures may not be popular, they will likely go a long way in saving lives. It is important to seek professional help if you or a loved one struggles with alcohol addiction. There are options for treatment.