Recently at a legislative forum in Kendallville, a discussion about a proposed increase in the cigarette tax led to a question about a possible tax on alcohol.
It’s an idea that legislators should give some thought as they mull over ways to pay for health-care related expenses — particularly when looking at investing in mental health and addiction treatment. But these taxes also can go toward other budget items.
Currently, 50 percent of the revenue collected from the alcohol excise tax is distributed to the general fund, with the remaining 50 percent being allocated to cities and towns according to a formula based on population.
During fiscal year 2016, Indiana collected $48.3 million in alcohol excise tax revenue, according to the state’s 2016 taxes, revenues and appropriations handbook.
Among our 50 states’ excise taxes on alcohol, Indiana ranks 24th highest for liquor, 33rd highest for wine and 40th highest for beer, according to information found at salestax handbook.com/indiana/alcohol.
At 99 cents per pack, Indiana ranks 37th highest in cigarette taxes. Ohio is 25th and Michigan is 14th. Nationwide, the average state cigarette tax is $1.69 per pack.
According to the Indiana Division of Mental Health & Addictions, at least 50 percent of Hoosiers drink alcohol, although not all of them are regular drinkers. An estimated 26 percent of adult Hoosiers smoke cigarettes, according to the U.S. Centers for Disease Control and Prevention, significantly higher than the national average of 15.1 percent.
If the government raises the taxes on alcohol and/or cigarettes, it is likely going to pull extra tax dollars more heavily from people who work in certain industries and occupations.
As it turns out, in a number of studies conducted in the past 10 years, miners, construction workers and those in the food and beverage industries rank in the top three occupations for smoking (around 30 percent) and for heavy alcohol consumption (11.8 to 17.5 percent).
The fact that the occupations that tend to consume the most alcohol and cigarettes are the same is probably not a coincidence given, as the U.S. Department of Health and Human Services has found, people who drink are more likely to smoke and those who smoke are more likely to drink. The two are related, according to the department.
(Although, for those who are curious, when such studies break groups down into specific professions — instead of grouping them into a larger industry mix — lawyers and doctors typically rank fourth and fifth as occupations with the highest amount of alcohol consumption.)
So, while we encourage lawmakers to look at both alcohol and cigarette excise taxes when looking for additional funding, we hope they also consider exactly from whom the additional revenue likely will be coming.